Use the following information \(\begin{array}{c|c} & ₦\\ \hline\text{Opening capital} & 60,000\\ \text{Drawings} & 4,000\\ \text{Cost of sales} & 50,000\\ \...

Answer Details

To calculate the closing capital, we need to start with the opening capital, and then add the profit and subtract any drawings. First, let's calculate the cost of goods sold (COGS): COGS = Cost of sales + (Mark-up x Cost of sales) COGS = 50,000 + (0.5 x 50,000) = 75,000 Next, let's calculate the gross profit: Gross profit = Sales - COGS Gross profit = (1 + Mark-up) x COGS - COGS Gross profit = Mark-up x COGS Gross profit = 0.5 x 50,000 = 25,000 Now we can calculate the net profit: Net profit = Gross profit - General expenses Net profit = 25,000 - 7,000 = 18,000 Finally, we can calculate the closing capital: Closing capital = Opening capital + Net profit - Drawings Closing capital = 60,000 + 18,000 - 4,000 = 74,000 Therefore, the answer is ₦74,000.