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Difficulty: EasyTrading Account and Gross Profit Calculation

A business owner extracted the following balances from the trading records for the year ended 31 December 2025:

- Opening Inventory: ₦15,000\text{₦}15,000
- Purchases: ₦80,000\text{₦}80,000
- Carriage Inwards: ₦2,000\text{₦}2,000
- Closing Inventory: ₦20,000\text{₦}20,000

What is the Cost of Goods Sold in Naira?

Answer: 77000 ₦

Answer

The Cost of Goods Sold is ₦77,000.
The Cost of Goods Sold is calculated by adding Opening Inventory (₦15,000), Purchases (₦80,000), and Carriage Inwards (₦2,000), then subtracting Closing Inventory (₦20,000), giving a final result of ₦77,000.

Step-by-Step Solution

1
Sum opening inventory, purchases, and carriage inwards
₦15,000+₦80,000+₦2,000=₦97,000\text{₦}15,000 + \text{₦}80,000 + \text{₦}2,000 = \text{₦}97,000
Carriage inwards is a direct cost added to purchases to determine total goods available for sale.
2
Deduct closing inventory
₦97,000−₦20,000=₦77,000\text{₦}97,000 - \text{₦}20,000 = \text{₦}77,000
Closing inventory represents unsold stock and must be subtracted to arrive at the cost of stock sold.

Key Concept

Cost of Goods Sold Calculation
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Topics

Trading Account and Gross Profit Calculation

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