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WAEC Financial Accounting 2010 Question 18

Question 18

Final Accounts of a Sole Trader

Sales was D12,500, total expenses was D2,500 and net profit is 10% of sales. What is the gross profit?

  1. A.D11,250
  2. B.D8,750
  3. C.D3,750
  4. D.D 1,250
Show the answer and explanation

Answer: C (D3,750)

Explanation

Net profit = 10% × 12,500 = 1,250; gross profit = net profit + expenses = 1,250 + 2,500 = D3,750.