Use the following information to answer question, \(\begin{array}{c|c} & ₦\\ \hline \text{Opening stock} & 40,000\\ \text{Purchases} & 130,000\\ \text{Closi...

Answer Details

To calculate the gross profit, we need to subtract the cost of goods sold from the total sales revenue. The cost of goods sold is calculated as follows: Cost of goods sold = Opening stock + Purchases - Closing stock Cost of goods sold = 40,000 + 130,000 - 32,000 = 138,000 Now, we can calculate the gross profit as follows: Gross profit = Total sales - Cost of goods sold Gross profit = 180,000 - 138,000 = 42,000 Therefore, the gross profit is ₦42,000. In summary, gross profit is the profit made by a business after deducting the cost of goods sold from the total sales revenue. It is an important metric in evaluating a business's profitability and financial health.