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WAEC Financial Accounting 1998 Question 6

Question 6

Interpretation of Accounts

Debtors: N30,000
Creditors: N20,000
Opening Stock: N15,000
Closing Stock: N18,000
Wages: N3,000
Salaries: N10,000
Purchases: N30,000
Sales: N60,000
The gross profit percentage is

  1. A.67%
  2. B.55%
  3. C.50%
  4. D.45%
  5. E.33%
Show the answer and explanation

Answer: C (50%)

Explanation

Cost of sales = 15,000 + 30,000 + wages 3,000 − 18,000 = 30,000; gross profit 30,000 ÷ 60,000 = 50%.