Alhaji Musa, a sole trader in Lagos, recorded the following for the year ended 31 December 2023: Opening inventory ₦480,000; Purchases ₦3,240,000; Carriage inwards ₦60,000; Closing inventory ₦520,000; Sales returns ₦140,000; Gross sales ₦5,200,000. What is Alhaji Musa's gross profit for the year?

Net sales = ₦5,200,000 − ₦140,000 = ₦5,060,000. Cost of goods sold = Opening inventory ₦480,000 + Purchases ₦3,240,000 + Carriage inwards ₦60,000 − Closing inventory ₦520,000 = ₦3,260,000. Gross profit = ₦5,060,000 − ₦3,260,000 = ₦1,800,000. Carriage inwards is correctly included in cost of goods sold as it represents the cost incurred to bring goods to their present location, consistent with IAS 2 (as adopted by FRCN).