Accounting JAMB

If the opening stock is 5% of sales. Calculate the purchases.

A. N95,600
B. N95,000
C. N90,600
D. N85,000

Correct Answer:

Option C – N90,600

Explanation

opening stock + cost of goods sold – closing stock = purchase

Remember COGS was given as;

cost of goods sold = sales – profit (10% of sales)

100,000 – 10,000 = 90,000

Hence we have;

purchase = 5,000 + 90000 – 5,600 = 90,600

Sunday

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