JAMB Principles of Accounts 2018 Question 27

Question 27

Departmental Accounts

Use the information below to answer questions 27 and 28.
Departmental Trading Account (Extract) (shown in the figure).
Goods worth N 300 was transferred from department Q to P. Similarly, P's total expenses for the period was ₦200.

What was department Q's gross profit?

A.₦2 500
B.₦2 200
C.₦2 300
D.₦1700

Show the answer and explanation

Answer: C (₦2 300)

Explanation

Q's cost of sales = 1,000 + 1,500 − 300 transferred out − 500 closing = ₦1,700. Gross profit = 4,000 − 1,700 = ₦2,300.