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JAMB Principles of Accounts 2012 Question 16

Question 16

Final Accounts of a Sole Trader

Given:
Stock 1/1 ₦20,000
Add purchases ₦250,000
Cost of goods available for sale ₦270,000
Less stock 31/12 ₦40,000
Cost of goods sold ₦230,000
Rent expenses ₦35,000
Net sales ₦370,000
Calculate the net profit.

  1. A.₦35,000
  2. B.₦40,000
  3. C.₦105,000
  4. D.₦115,000
Show the answer and explanation

Answer: C (₦105,000)

Explanation

Net profit = gross profit 140 000 − rent 35 000 = ₦105 000.