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WAEC Financial Accounting 2023 Question 45

Question 45

Incomplete Records

Use the following information to answer questions 45 and 46.
Capital (01/01/2020): Le 1,934,600
Capital (31/12/2020): Le 2,530,000
Expenses: Le 345,900
Drawings for 2020: Le 72,500
Additional capital for 2020: Le 250,000
The gross profit for the year is

  1. A.Le 763,800.
  2. B.Le 595,400.
  3. C.Le 417,900.
  4. D.Le 167,900.
Show the answer and explanation

Answer: A (Le 763,800.)

Explanation

Net profit = 2,530,000 − 1,934,600 + 72,500 − 250,000 = 417,900; gross profit = net profit + expenses 345,900 = Le 763,800.