Question

8. The following information relates to Raisa's grocery store as at 31st December 2018: Stock (1st January 2018) N20,000; Purchases N150,000; Sales N230,000; Carriage inwards N4,000; Rent received N80,000; Salaries N29,000; Stock (31st December 2018) N35,000. You are required to calculate: (a) Cost of goods sold; (b) Gross profit; (c) Net profit; (d) Percentage of gross profit.

Accepted Answer

See the workings table in the Diagram column. (a) Cost of goods sold = Opening stock + Purchases + Carriage inwards - Closing stock = N(20,000+150,000+4,000-35,000) = N139,000.
(b) Gross profit = Sales - Cost of goods sold = N(230,000-139,000) = N91,000.
(c) Net profit = Gross profit + Rent received - Salaries = N(91,000+80,000-29,000) = N142,000.
(d) Percentage of gross profit = (Gross profit/Sales) x 100% = (91,000/230,000) x 100% = 39.6%.

WAEC Commerce 2020 Theory — Question 8

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