JAMB Accounting 2015 Objective — Question 16

Question 16 of 50 from the Joint Admissions and Matriculation Board (JAMB) Accounting 2015 Objective paper, with the correct answer and a full explanation.

A pottery company had sales of ₦176,000 during the current period and a gross profit rate of 40%. The company's cost of merchandise available for sale during the period was ₦128,000. The company's ending inventory is

A. ₦22,400Correct
B. ₦32,000
C. ₦51,200
D. ₦76,800

Explanation

Gross profit = 40%×176,000 = ₦70,400. Cost of goods sold = Sales − Gross profit = 176,000−70,400 = ₦105,600. Ending inventory = Cost of goods available for sale − COGS = 128,000−105,600 = ₦22,400.

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