To determine the net profit from the provided financial data, we need to follow a systematic approach. Let's break down the information given and calculate the net profit step by step.
Step 1: Calculate Cost of Goods Sold (COGS)
To find the net profit, we first need to calculate the Cost of Goods Sold (COGS). COGS is calculated using the formula:
[
\text{COGS} = \text{Opening Stock} + \text{Purchases} + \text{Carriage Inwards} - \text{Closing Stock}
]
However, we do not have the closing stock provided in the question. For the sake of this calculation, we will assume that all stock purchased was sold, which means the closing stock is zero.
Given:
- Opening Stock = ₦2,600
- Purchases = ₦4,000
- Carriage Inwards = ₦500
Now, substituting these values into the COGS formula:
[
\text{COGS} = 2,600 + 4,000 + 500 - 0 = 7,100
]
Step 2: Calculate Gross Profit
Next, we need to calculate the Gross Profit. Gross Profit is calculated as follows:
[
\text{Gross Profit} = \text{Sales} - \text{COGS}
]
Given:
- Sales = ₦9,000
Now substituting the values:
[
\text{Gross Profit} = 9,000 - 7,100 = 1,900
]
Step 3: Calculate Net Profit
To find the Net Profit, we need to subtract any operating expenses from the Gross Profit. In this case, the only operating expense provided is the Carriage Outwards.
Given:
- Carriage Outwards = ₦500
Now we can calculate the Net Profit:
[
\text{Net Profit} = \text{Gross Profit} - \text{Carriage Outwards}
]
Substituting the values:
[
\text{Net Profit} = 1,900 - 500 = 1,400
]
Conclusion
Thus, the net profit is
₦1,400.
Explanation of Options
- Option A: ₦4,000 - This option is incorrect because it does not account for the COGS and operating expenses correctly.
- Option B: ₦4,500 - This option is also incorrect as it likely miscalculates either the COGS or the Gross Profit.
- Option C: ₦5,000 - This option is incorrect as it does not reflect the actual calculations based on the provided data.
- Option D: ₦1,400 - This is the correct answer, as shown in the calculations above.
Revision Summary
- COGS Calculation: Opening Stock + Purchases + Carriage Inwards - Closing Stock (assumed zero).
- Gross Profit Calculation: Sales - COGS.
- Net Profit Calculation: Gross Profit - Operating Expenses (Carriage Outwards).
- Final Answer: Net Profit is ₦1,400, which corresponds to Option D.