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JAMB UTME - Principles of Accounts - 2019

Question 1 Report

Use the following information to answer this question

The following are the final accounts of a trading organisation Wazobi ventures, for the year ended 30th June, 19x8

  ₦ ₦
Sales

Less: cost of goods sold

   233,000

170,000
    63,000
less: Overhead Expenses

Admin expenses

Selling expenses

Other overhead expenses

16,800

15,000

6,200

 
Net profit   25,000

Calculate the net profit on percentage of expenses.

Answer Details
To calculate the net profit as a percentage of expenses, we need to first determine the total expenses of the company for the year. We can do this by adding up all of the overhead expenses: admin expenses + selling expenses + other overhead expenses. Total expenses = ₦16,800 + ₦15,000 + ₦6,200 = ₦38,000 Next, we can calculate the net profit as a percentage of expenses by dividing the net profit by the total expenses and multiplying by 100. Net profit as a percentage of expenses = (Net profit / Total expenses) x 100 = (₦25,000 / ₦38,000) x 100 = 65.79% Therefore, the correct answer is 65.79%, which is option (D). This means that for every ₦1 spent on expenses, the company earned a net profit of approximately ₦0.66. It's important to note that this percentage does not take into account the cost of goods sold, which is a separate expense and is already deducted from the sales figure.
Read lesson note on The Final Accounts Of A Sole Trader (JAMB)
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