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WAEC Financial Accounting 1994 Question 7

Question 7

Final Accounts of a Sole Trader

Use the following Trading Account (? marks figures you must work out):
Debit side: Opening Stock ₦1,200; Purchases ?; Add Carriage Inwards ₦300; Less returns outwards ₦1,570; Less closing stock ₦2,220; Gross Profit (25% of sales) ?; Total ₦28,500
Credit side: Sales ₦29,000; Less sales Returns ₦500; Net sales ₦28,500

What is the cost of goods purchased?

  1. A.₦22,095
  2. B.₦22,395
  3. C.₦22,765
  4. D.₦23,665
  5. E.₦23,965
Show the answer and explanation

Answer: D (₦23,665)

Explanation

Goods available 23,595 − opening stock 1,200 = 22,395 net; purchases = 22,395 − carriage 300 + returns outwards 1,570 = ₦23,665.