The following information relate to Jamiu & Co. Ltd for the year ended 31st March, 2006 N sales 12,000 opening stock 3,000 purchases 7,000 closing stock 2,0...
Question 1 Report
| N | |
| sales | 12,000 |
| opening stock | 3,000 |
| purchases | 7,000 |
| closing stock | 2,000 |
| wages | 500 |
| Transport | 400 |
| electricity | 300 |
From the above figures, calculate (showing all workings) the
(a) cost of goods sold.
(b) net profit percentage.
(c) rate of turnover.
Answer Details
Jamiu & Co. Ltd - year ended 31st March, 2006
| Item | N |
|---|---|
| Sales | 12,000 |
| Opening stock | 3,000 |
| Purchases | 7,000 |
| Closing stock | 2,000 |
| Wages | 500 |
| Transport | 400 |
| Electricity | 300 |
(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
\[ \text{Rate of turnover} = \frac{\text{Cost of goods sold}}{\text{Average stock}} = \frac{8,000}{2,500} = 3.2 \text{ times} \]
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