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WAEC Financial Accounting 2021 Question 14

Question 14

Interpretation of Accounts

Use the following information to answer questions 13 and 14.
Sales for the year: Le 450,000
Purchases for the year: Le 230,000
Opening stock: Le 60,000
Closing stock: Le 40,000
The mark-up is

  1. A.88%.
  2. B.80%.
  3. C.44.44%
  4. D.26.67%
Show the answer and explanation

Answer: B (80%.)

Explanation

Gross profit = 450,000 − 250,000 = 200,000; mark-up = 200,000 ÷ 250,000 × 100 = 80%.