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JAMB Principles of Accounts 2014 Question 38

Question 38

Branch Accounts

Hussaina Enterprises sent goods worth ₦800,000 at cost plus mark-up of 25% to its branch.
What is the cost price of the goods sent to the branch?

  1. A.₦600,000.
  2. B.₦620,000.
  3. C.₦640,000.
  4. D.₦700,000.
Show the answer and explanation

Answer: C (₦640,000.)

Explanation

Cost + 25% = 800 000, so cost = 800 000 ÷ 1.25 = ₦640 000.