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

  • A N95,600
  • B N95,000
  • C N90,600
  • D N85,000
jamb 2009accounting

The correct answer is C. N90,600

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

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