Use this information below to answer this question.Trading Account (Extract).................N.............................N...... Opening stock...19500.......

Use this information below to answer this question.Trading Account (Extract).................N.............................N......

Opening stock...19500........Sales............96 000..

Add purchases...68700.................................

................88200.................................

Less closing stock..?.................................

Cost of goods sold..?.................................

Gross profit C/D....?.................................

....................?..........................?......

The gross profit margin is 20%

Determine the closing stock

Answer Details

The gross profit margin is given as 20%, which means that the cost of goods sold (COGS) is equal to 80% of the total sales. Total sales = ₦96,000 80% of sales = 0.8 x ₦96,000 = ₦76,800 (which is the cost of goods sold) To calculate the closing stock, we use the formula: Closing stock = Opening stock + Purchases - Cost of goods sold We are given the opening stock as ₦19,500 and the purchases as ₦68,700. Therefore: Closing stock = ₦19,500 + ₦68,700 - ₦76,800 Closing stock = ₦11,400 Therefore, the closing stock is ₦11,400. Hence, the correct answer is: ₦11,400.