To determine the Cost of Goods Sold (COGS) from the provided data, we will follow a systematic approach. Step 1: Understand the Formula for COGS The formula to calculate the Cost of Goods Sold is: [ \text{COGS} = \text{Opening Stock} + \text{Purchases} - \text{Closing Stock} ] Where: - Opening Stock is the value of inventory at the beginning of the period. - Purchases is the total value of inventory bought during the period. - Closing Stock is the value of inventory remaining at the end of the period. Step 2: Plug in the Values From the question, we have: - Opening Stock = N 40,000 - Purchases = N 115,000 - Closing Stock = N 60,000 Now, we can substitute these values into the COGS formula: [ \text{COGS} = 40,000 + 115,000 - 60,000 ] Step 3: Perform the Calculation Now, let's perform the arithmetic step-by-step:

1. Add Opening Stock and Purchases: [ 40,000 + 115,000 = 155,000 ]
2. Subtract Closing Stock: [ 155,000 - 60,000 = 95,000 ]

Thus, the Cost of Goods Sold (COGS) is N 95,000. Conclusion: Correct Option The correct answer is B. N 95,000. Step 4: Explanation of Other Options Now, let's analyze the other options to understand why they are incorrect:

• Option A: N 155,000
• This option represents the total of Opening Stock and Purchases without accounting for the Closing Stock. It does not reflect the actual cost of goods sold because it ignores the inventory that was not sold (Closing Stock).
• Option C: N 50,000
• This option does not follow the correct calculation method. It seems to be an arbitrary figure that does not relate to the provided data. It could be a miscalculation or misunderstanding of how to apply the COGS formula.
• Option D: N 30,000
• Similar to Option C, this figure does not correspond to any logical calculation based on the provided data. It is far too low and does not reflect the values given for Opening Stock, Purchases, or Closing Stock.

Common Pitfalls

• Ignoring Closing Stock: A common mistake is to forget to subtract the Closing Stock from the total of Opening Stock and Purchases, leading to an inflated COGS.
• Misunderstanding Inventory Terms: Confusing Opening Stock, Purchases, and Closing Stock can lead to incorrect calculations. Always ensure you understand what each term means.

Revision Summary

• The formula for COGS is: COGS = Opening Stock + Purchases - Closing Stock.
• For the given values, COGS calculates to N 95,000.
• Always remember to account for Closing Stock to avoid overestimating COGS.
• Review the definitions of inventory terms to ensure accurate calculations.