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JAMB Principles of Accounts 2023 Question 28

Question 28

Final Accounts of a Sole Trader

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 opening stock is 5% of sales, calculate the purchases.

  1. A.₦90,600
  2. B.₦95,600
  3. C.₦95,000
  4. D.₦85,000
Show the answer and explanation

Answer: A (₦90,600)

Explanation

Opening stock = 5% × 100,000 = ₦5,000. Purchases = cost of goods sold + closing stock − opening stock = 90,000 + 5,600 − 5,000 = ₦90,600.