Use the information below to answer question 4 and 5.Sales ₦20,000 Cost sales ₦10,000 Operating expenses ₦2,500 Expenses prepaid included In operating expen...

Use the information below to answer question 4 and 5.Sales ₦20,000

Cost sales ₦10,000

Operating expenses ₦2,500

Expenses prepaid included

In operating expenses ₦500Calculate the net profit?

Answer Details

To calculate the net profit, we need to subtract the total expenses from the total sales revenue. The cost of sales is ₦10,000, and the operating expenses are ₦2,500. We are also told that ₦500 of the operating expenses is prepaid, which means that it should not be included in the calculation of expenses for this period. Therefore, the total expenses for this period are ₦2,000 (i.e., ₦2,500 - ₦500). To calculate the net profit, we subtract the total expenses (₦2,000) from the sales revenue (₦20,000): Net profit = ₦20,000 - ₦10,000 - ₦2,000 = ₦8,000 Therefore, the answer is option (iii) ₦8,000.