JAMB Principles of Accounts 2017 Question 16

Question 16

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%.

The closing stock for this company is

A.₦72000
B.₦42500
C.₦31250
D.₦45000.

Show the answer and explanation

Answer: C (₦31250)

Explanation

Cost of sales = 157,000 − 39,250 = ₦117,750. Closing stock = 149,000 − 117,750 = ₦31,250.