WAEC Commerce 2021 Paper

Concept:Gross profit is the amount remaining after deducting the cost of goods sold from sales revenue.Cost of goods sold is found by adding opening stock to purchases and then subtracting closing stock.Explanation:From the trading figures, identify the values given.Sales are #50,000.00.Opening stock is #10,000.00.Purchases are #35,000.00.Closing stock is #15,000.00.First, calculate the cost of goods sold.The formula is:$$\text{COGS} = \text{Opening stock} + \text{Purchases} - \text{Closing stock}$$Putting in the given figures:$$\text{COGS} = 10{,}000 + 35{,}000 - 15{,}000$$$$\text{COGS} = 30{,}000$$Next, subtract the cost of goods sold from sales to find gross profit.$$\text{Gross profit} = \text{Sales} - \text{COGS}$$$$\text{Gross profit} = 50{,}000 - 30{,}000$$$$\text{Gross profit} = 20{,}000$$So, the gross profit is #20,000.00.Answer:Gross profit = #20,000.00 (Option B)