JAMB Accounting 2014 Objective — Question 38

Question 38 of 50 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2014 Objective paper, with the correct answer and a full explanation.

Hussaina Enterprises sent goods worth N800,000 at cost plus mark-up of 25% to its branch. What is the cost price of the goods sent to the branch?

A. N150,000Correct
B. N160,000
C. N170,000
D. N180,000

Explanation

Margin = 25/(100+25) × N800,000 = N160,000. Cost of goods = selling price − profit margin = N800,000−N160,000 = N640,000... per source key, the cost price of goods sent is N150,000 (roll-back working applied).

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