The following information relate to Jamiu & Co.... | WAEC SSCE - Commerce - 2010 (Essay)

Question 1 Report

From the above figures, calculate (showing all workings) the

(a) cost of goods sold.

(b) net profit percentage.

Answer

Jamiu & Co. Ltd - year ended 31st March, 2006

(a) Cost of goods sold

= Opening stock + Purchases - Closing stock

= 3,000 + 7,000 - 2,000 = N8,000

(b) Net profit percentage

Gross profit = Sales - Cost of goods sold = 12,000 - 8,000 = N4,000

Total expenses = Wages + Transport + Electricity = 500 + 400 + 300 = N1,200

Net profit = Gross profit - Expenses = 4,000 - 1,200 = N2,800

\[ \text{Net profit \%} = \frac{\text{Net profit}}{\text{Sales}} \times 100 = \frac{2,800}{12,000} \times 100 = 23.33\% \]

(c) Rate of turnover

Average stock = (Opening stock + Closing stock) / 2 = (3,000 + 2,000) / 2 = N2,500

\[ \text{Rate of turnover} = \frac{\text{Cost of goods sold}}{\text{Average stock}} = \frac{8,000}{2,500} = 3.2 \text{ times} \]

Answer Details