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JAMB Principles of Accounts 2014 Question 39

Question 39

Branch Accounts

Hussaina Enterprises sent goods worth ₦800,000 at cost plus mark-up of 25% to its branch.
Determine the profit on the goods sent to the branch at profit margin of 25% mark-up.

  1. A.₦150,000.
  2. B.₦160,000.
  3. C.₦170,000.
  4. D.₦ 180,000.
Show the answer and explanation

Answer: B (₦160,000.)

Explanation

Profit (mark-up) = 800 000 − cost 640 000 = ₦160 000, which is 25% of cost.