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WAEC Commerce 1998 Question 91

Question 91

Business Calculations

XYZ Ltd's total sales was N100,000. It had opening stock of N20,000 and closing stock of N22,000. It bought goods worth N80,000 and paid N2,000 for rent.
XYZ Ltd's Gross Profit is

  1. A.N58,000.00
  2. B.N42,000.00
  3. C.N38,000.00
  4. D.N22,000.00
  5. E.N20,000.00
Show the answer and explanation

Answer: D (N22,000.00)

Explanation

Cost of goods sold = N20,000 + N80,000 − N22,000 = N78,000; gross profit = N100,000 − N78,000 = N22,000.