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JAMB Principles of Accounts 2014 Question 37

Question 37

Branch Accounts

If goods are sent to branch at 25% on cost, what will be the cost of goods sent to the branch at a selling price of ₦100,000?

  1. A.₦130,000.
  2. B.₦125,000.
  3. C.₦80,000.
  4. D.₦75 000.
Show the answer and explanation

Answer: C (₦80,000.)

Explanation

Price = cost + 25% of cost = 125% of cost. Cost = 100 000 × 100/125 = ₦80 000.