Explanation

Step 1: Calculate Cost of Goods Sold (COGS)
Opening Stock = ₦2,600
Purchases = ₦4,000
Carriage Inwards = ₦500
COGS = Opening Stock + Purchases + Carriage Inwards
COGS = ₦2,600 + ₦4,000 + ₦500 = ₦7,100

Step 2: Calculate Gross Profit
Sales = ₦9,000
Gross Profit = Sales – COGS
Gross Profit = ₦9,000 – ₦7,100 = ₦1,900

Step 3: Deduct Operating Expenses to get Net Profit
Carriage Outwards (delivery expense) = ₦500
Net Profit = Gross Profit – Carriage Outwards
Net Profit = ₦1,900 – ₦500 = ₦1,400

Key Point: Carriage inwards (transport costs on goods purchased) adds to cost of goods. Carriage outwards (delivery costs to customers) is a selling expense that reduces profit.