JAMB Principles of Accounts 2017 Question 15

Question 15

Interpretation of Accounts

Use the information below to answer questions 15 and 16.
Erero's Trading Account for the month ended 31/05/2001 (shown in the figure).
The gross profit ratio for the company is 25%.

If the total expenses is ₦20845, what will be the net profit for the company during the month?

A.₦18405
B.₦21655
C.₦19149
D.₦6168

Show the answer and explanation

Answer: A (₦18405)

Explanation

Gross profit = 25% × net sales 157,000 = ₦39,250. Net profit = 39,250 − 20,845 = ₦18,405.