JAMB Accounts Principles of Accounts 2019 Paper

Concept:A margin is a percentage of selling price, so convert it to a mark-up on cost before finding profit.Explanation:Given uniform margin is $33\frac{1}{3}\% = \frac{1}{3}$ of selling price. This means cost is the remaining $\frac{2}{3}$ of selling price. Therefore, profit as a percentage of cost is: $$\frac{\text{Margin}}{1 - \text{Margin}} = \frac{\frac{1}{3}}{1 - \frac{1}{3}} = \frac{\frac{1}{3}}{\frac{2}{3}} = \frac{1}{2} = 50\%$$ Calculate the cost of goods sold: $$\text{Cost of goods sold} = \text{Opening Stock} + \text{Purchases} - \text{Closing Stock}$$ $$= 7{,}000 + 60{,}000 - 12{,}000 = \#55{,}000$$ Find the profit using the 50% mark-up: $$\text{Profit} = 50\% \times 55{,}000 = \#27{,}500$$ Finally, sales equal cost plus profit: $$\text{Sales} = 55{,}000 + 27{,}500 = \#82{,}500$$Answer:Sales = $\#82{,}500$. Correct option: B.