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JAMB Principles of Accounts 2014 Question 34

Question 34

Final Accounts of a Sole Trader

Given:
Sales ₦180,000
Stock 1/1 ₦25,000
Purchases ₦110,000
Sales returns ₦1,000
Purchases returns ₦1,500
Gross profit ₦58,000
Determine the value of stock as at 31st December.

  1. A.₦8,000.
  2. B.₦9,500.
  3. C.₦12,500.
  4. D.₦15,500.
Show the answer and explanation

Answer: C (₦12,500.)

Explanation

Net sales 179 000 − gross profit 58 000 = cost of sales 121 000. Goods available = 25 000 + 110 000 − 1 500 = 133 500. Closing stock = 133 500 − 121 000 = ₦12 500.