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WAEC Financial Accounting 2008 Question 15

Question 15

Incomplete Records

Opening capital N60,000
Drawings N4,000
Cost of sales N50,000
General expenses N7,000
Mark-up 50%
Net profit is

  1. A.N43,000
  2. B.N25,000
  3. C.N23,000
  4. D.N18,000.
Show the answer and explanation

Answer: D (N18,000.)

Explanation

Gross profit = 50% × 50,000 = 25,000; net profit = 25,000 − 7,000 = N18,000.