WAEC Accounting 2010 Paper

Concept:Net profit is the amount left after total expenses are deducted from gross profit.Therefore, gross profit can be found by adding total expenses back to net profit.Explanation:Sales are $\mathrm{D}12,500$.Net profit is 10% of sales:$$\text{Net Profit} = 10\% \times 12,500 = \frac{10}{100} \times 12,500 = \mathrm{D}1,250.$$The accounting relationship is:$$\text{Net Profit} = \text{Gross Profit} - \text{Total Expenses}.$$Rearrange the formula to make gross profit the subject:$$\text{Gross Profit} = \text{Net Profit} + \text{Total Expenses}.$$Substitute the values:$$\text{Gross Profit} = 1,250 + 2,500 = \mathrm{D}3,750.$$Answer:The gross profit is $\mathrm{D}3,750$, which is option C.