Abelawo ltd operates a retail branch at Aba. All purchases are made by the head office in Onitsha and goods are charged to the branch at cost plus 50%. During the year ended. Goods sent to branch at invoiced price is ₦30,870, cash sales ₦13,020 and Bad debt amounted to 129. From the following, what is the profit?

  • A 20,580
  • B 10,290
  • C 7980
  • D 30,870
jamb 2019accounting

The correct answer is B. 10,290

Goods sent to branch : Selling price ⇒ ₦30,870 Convert mark-up to margin
50 100 = 1 2 = 1 2 + 1 = 1 3
Profit = 1 3 × 30,870
= ₦10,290 Previous question Next question