Question on: JAMB Accounting - 2019
Abelawo ltd operates a retail branch at Aba. All purchases are made by the head office in Onitsha and goods are charged to the branch at cost plus 50%. During the year ended. Goods sent to branch at invoiced price is ₦30,870, cash sales ₦13,020 and Bad debt amounted to 129. From the following, what is the profit?
A
20,580
B
10,290
C
7980
D
30,870
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Correct Option: B
Given that the goods sent to branch = ₦30,870, let's convert mark-up to margin
| 50
100 |
= | 1
2 |
= | 1
2 + 1 |
= | 1
3 |
| Profit | = | 1
3 |
× | 30,870 |
= ₦10,290
Hence, profit = ₦10,290
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