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WAEC Financial Accounting 2020 Question 45

Question 45

Departmental Accounts

Use the following information to answer questions 43 to 45.
Stock 01/01/2018: Sportswear GH¢11,400; Cosmetics GH¢28,500
Purchases: Sportswear GH¢80,000; Cosmetics GH¢120,000
Sales: Sportswear GH¢150,000; Cosmetics GH¢250,000
Wages paid: Sportswear GH¢7,600; Cosmetics GH¢6,500
Stock 31/12/2018: Sportswear GH¢15,200; Cosmetics GH¢27,600
The gross profit for Sportswear Department was

  1. A.GH¢76,200.
  2. B.GH¢73,800.
  3. C.GH¢66,200.
  4. D.GH¢58,600.
Show the answer and explanation

Answer: B (GH¢73,800.)

Explanation

Cost of sales = 11,400 + 80,000 − 15,200 = GH¢76,200. Gross profit = sales − cost of sales = 150,000 − 76,200 = GH¢73,800. Wages are a departmental expense charged in the profit and loss account.