₦ Debtors opening 4000 Debtors closing 1500 Cash received from debtors 8500 Bad debts written off 350 Discount allowed 500 Discount received 1000 If the gro...

Assessment: JAMB UTME - Principles of Accounts - 2017 Subject: Financial Accounting

Question 1 Report

₦
Debtors opening 4000
Debtors closing 1500
Cash received from debtors 8500
Bad debts written off 350
Discount allowed 500
Discount received 1000

If the gross profit is ₦5 000, what is the net profit?

Answer Details
If the gross profit is ₦5,000, then the net profit is calculated below;
The item that will appear in the profit and loss account are;
Bad debt written off ₦350, Discount allowed ₦500 and Discount received ₦1,000

Gross Profit 5000 Discount Received 1000 6000 Expenses Bad debt. 350 Discout Allowed 500 850 Net profit 5 , 150

Net profit is the profit made after all the expenses incurred are deducted from the gross profit
₦5150 is the net profit calculated i.e bad debt 350 &nplus; discount allowed 500 &nplus; net profit 5,150 less gross profit 5,000 + discount received 1,000

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