Accounting JAMB

The gross profit for K is?

Departments K Y
Opening 2,500 800
Purchases 120,000 100,000
Sales 180,000 200,000
Salary 8,000 30,000
Closing stock 3,000 1,500
Rate expenses of 1,500 are apportioned in the ratio 1:2

 

A. # 60,700
B. #23,500
C. #60,500
D. #82,500

Correct Answer:

Option C – #60,500

Explanation

Sales – Cost of Goods Sold = Gross Profit

COGS = Beginning Inventory + Purchases During the Period – Ending Inventory.

COGS = 2,500, + 120,000 – 3,000 = 119,500

gross profit for K = 180,000 – 119,500 = 60,500

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