Use the following information to answer the given question: \(\begin{array}{c|c} & N \\ \hline \text{Stock at 1st Jan. 1901} & 6,500 \\ \text{Stock at 31st ...

To calculate the amount charged in the profit and loss account, we need to start by calculating the cost of goods sold (COGS) for the year. COGS = Opening Stock + Purchases - Closing Stock We are given the opening stock as N6,500, and the closing stock as N5,500. We also know that N20,000 was paid for goods during the year. Therefore, the calculation for COGS is as follows: COGS = N6,500 + N20,000 - N5,500 = N21,000 Next, we need to calculate the gross profit. We are told that the gross profit is 25% on cost. Therefore, we can calculate the gross profit as follows: Gross Profit = COGS x Gross Profit Percentage Gross Profit = N21,000 x 25% = N5,250 Finally, we need to subtract the administrative and selling expenses from the gross profit to get the amount charged in the profit and loss account: Amount Charged in the Profit and Loss Account = Gross Profit - Administrative and Selling Expenses Amount Charged in the Profit and Loss Account = N5,250 - N2,750 = N2,500 Therefore, the correct answer is N2,500. "N2,750," is the amount of the administrative and selling expenses, but not the amount charged in the profit and loss account.