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JAMB Principles of Accounts 2023 Question 27

Question 27

Incomplete Records

Use the information below to answer questions 27 and 28.
Magodo Enterprises Trading Account (Extract)
Opening stock ₦5,000 | Sales ₦100,000
Purchases ?
?
Less closing stock ₦5,600
Cost of goods sold ?
Gross profit ?
Total ₦100,000 | Total ₦100,000
If the gross profit margin is 10%, what is the value of the cost of goods sold?

  1. A.₦110,000
  2. B.₦10,000
  3. C.₦90,000
  4. D.₦105,600
Show the answer and explanation

Answer: C (₦90,000)

Explanation

Gross profit = 10% of sales ₦100,000 = ₦10,000, so cost of goods sold = 100,000 − 10,000 = ₦90,000.