Use the information below to answer questions Adex Ltd. issues stock to its retail branches at cost price. The following particulars relate to Ede branch.St...

Assessment: JAMB UTME - Principles of Accounts - 2002 Subject: Financial Accounting

Question 1 Report

Use the information below to answer questions Adex Ltd. issues stock to its retail branches at cost price. The following particulars relate to Ede branch.Stock at branch 1st January at cost............₦400

Goods sent to branch at cost...................₦8000

Returns to head ...............................₦340

Cash sales ....................................₦9160

Stock at branch 31st December at cost..........₦720What is the gross profit carried to the profit and loss account?

Answer Details
To calculate the gross profit carried to the profit and loss account, we need to determine the cost of goods sold (COGS) first. We can calculate COGS by subtracting the cost of the ending inventory from the cost of goods available for sale. Cost of goods available for sale = Cost of stock at branch 1st January + Goods sent to branch at cost - Returns to head Cost of goods available for sale = ₦400 + ₦8000 - ₦340 Cost of goods available for sale = ₦8,060 Cost of ending inventory = Cost of stock at branch 31st December at cost Cost of ending inventory = ₦720 Cost of goods sold = Cost of goods available for sale - Cost of ending inventory Cost of goods sold = ₦8,060 - ₦720 Cost of goods sold = ₦7,340 Now that we have determined the cost of goods sold, we can calculate the gross profit as follows: Gross profit = Sales - Cost of goods sold Gross profit = Cash sales Gross profit = ₦9,160 - ₦7,340 Gross profit = ₦1,820 Therefore, the gross profit carried to the profit and loss account is ₦1,820.
Read lesson note on Stock Valuation (JAMB)
View Answer

Related Questions

1

In preparing the final accounts, the bad debt account is closed by a transfer to the?
2

Given: Stock (1/4/94) ₦800Purchases of flour ₦2450Sales ₦4745Wages of bakery staff ₦675Carriage outwards ₦50Salary of administrative staff ₦225Stock (31/3/95...
3

Use the information below to answer this question..............Total......... Dept.P.............Dept.Q ...............N...............N.................N Sa...
4

Use the information below to answer the question that follows: Adex Ltd. issues stock to its retail branches at cost price. The following particulars relate ...
5

Use the information below to answer this question Date.............QTY. .....RATE........TOTAL ...............(Units).....N...........N January 2nd.....500.....
6

Use the information below to answer this question The partnership agreement between Abba, Baba and Kaka contains the following provision: (i) 5% interest to ...
7

Use the information below to answer this question Date.............QTY. .....RATE........TOTAL ...............(Units).....N...........N January 2nd.....500.....
8

Use the information below to answer the question that follows: Debtors ₦20 Provision for bad debts 10% Provision for discount on debtors 5% The provision for...

Download The App On Google Playstore

Everything you need to excel in your exams

Green Bridge CBT Mobile App
Personalized AI Learning Chat Assistant
200,000+ Exam Questions Across IGCSE, JAMB, WAEC & NECO
Over 3,900 Lesson Notes
Offline Support - Learn Anytime, Anywhere
Green Bridge Timetable
Literature Summaries & Potential Questions
Track Your Performance & Progress
In-depth Explanations for Comprehensive Learning