Use the following information to answer the given question

\(\begin{array}{c|c} & N \\ \hline Sales & 200,000 \\ \text{Opening Stock} & 20,000 \\ purchases & 140,000 \\ \text{Closing Stock} & 10,000 \\ Expenses & 10,000\\ Bank & 10,000 \\ Capital & 85,000 \\ Creditors & 35,000 \\ Debtors & 50,000 \\ \text{Fixtures and fittings, cost} & 10,000 \\ \text{Freehold land and building} & 70,000 \\ Drawings & 10,000\end{array}\)

Gross profit is

  • A N70,000
  • B N60,000
  • C N50,000
  • D N40,000
waec 2001accounting

The correct answer is C. N50,000

Gross profit is calculated as Sales minus the Cost of Goods Sold (COGS). The COGS is calculated as the Opening Stock plus Purchases minus the Closing Stock.

Let’s calculate:

  1. COGS = Opening Stock + Purchases - Closing Stock = 20,000 + 140,000 - 10,000 = 150,000

  2. Gross Profit = Sales - COGS = 200,000 - 150,000 = 50,000

So, the correct answer is C. N50,000.

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