Sales ----------------------------------- #50,000 Debtors -------------------------------- #10,000 Cash-in-hand --------------------------#5,000 Opening stock -------------------------#30,000 Creditors ------------------------------- #8,000 Purchases ----------------------------- #16,000...

Sales ----------------------------------- #50,000 Debtors -------------------------------- #10,000 Cash-in-hand --------------------------#5,000 Opening stock -------------------------#30,000 Creditors ------------------------------- #8,000 Purchases ----------------------------- #16,000...

WAEC 2022

Sales ----------------------------------- #50,000
Debtors -------------------------------- #10,000
Cash-in-hand --------------------------#5,000
Opening stock -------------------------#30,000
Creditors ------------------------------- #8,000
Purchases ----------------------------- #16,000
Overdraft ------------------------------- #12,000
Closing stock -------------------------- #10,000

Calculate the gross profit.

A. #35,000.00
B. #20,000.00
C. #15,000.00
D. #14,000.00

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Correct Answer: Option D

Explanation

Gross Profit = Sales - Cost of Goods Sold (COGS)

COGS = Opening Stock + Purchases - Closing Stock
COGS = 30,000 + 16,000 - 10,000 = 36,000
Gross Profit = Sales - COGS
Gross Profit = 50,000 - 36,000 = #14,000

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