Theory question 107
Commercial Arithmetic(a) A man earns N150,000 per annum. He is allowed a tax free pay of N40,000. If he pays 25 kobo in the naira as tax on his taxable income, how much has he left?
(b) A bookshop had 650 copies of a book for sale. The books were marked at N75 per copy in order to make a profit of 30%. A bookseller bought 300 copies at 5% discount. If the remaining copies are sold at N75 each, calculate the percentage profit the bookshop would make on the whole?
Show the model answer
(a) Taxable income = 150,000 − 40,000 = N110,000. Tax = 0.25 × 110,000 = N27,500. Left = 150,000 − 27,500 = N122,500.
(b) Cost price per copy = 75 ÷ 1.3; total cost = 650 × 75/1.3 = N37,500.
Sales: 300 × 75 × 0.95 = N21,375 and 350 × 75 = N26,250; total N47,625.
Profit = 47,625 − 37,500 = N10,125; percentage profit = 10,125/37,500 × 100% = 27%.
The marked price is 130% of cost, so divide by 1.3 to get the cost.