Gce Model Questions Vol1 2019 Financial Accounting Question 33

For the year ended 31 December the following information is available for a trading business:\n\n- Sales: \(\,\text{₦}210,000\)\n- Opening stock: \(\,\text{₦}25,000\)\n- Closing stock: \(\,\text{₦}30,000\)\n- Gross‑profit ratio: 25 % of sales\n- Trade expenses (excluding salaries): \(\,\text{₦}12,000\)\n- Net profit: \(\,\text{₦}28,000\)\n- Drawings: \(\,\text{₦}15,000\)\n- Capital at the start of the year: \(\,\text{₦}80,000\)\n\nThe cash book shows total cash receipts of \(\,\text{₦}95,000\) and total cash payments of \(\,\text{₦}78,000\). The bank statement closing balance is \(\,\text{₦}5,000\) while the cash‑book closing balance is \(\,\text{₦}8,000\).\n\nUsing the above data, determine (a) the amount of purchases for the year and (b) the closing capital of the business.