JAMB UTME - Principles of Accounts - 2007

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An asset was purchase for ₦343m in 2003.

The estimated life of the asset was 3 years with a residual value of ₦28m.

What was the asset value at the beginning of the third year?

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Given:

Returns inwards............₦1500

Cash.......................₦1550

Discount...................₦2850

Capital....................₦3800

Debtors....................₦900

Sundry.....................N?

The value of sundry expenses is 150% of returns inwards plus 50% of debtors.

How much is sundry expenses?

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First, we need to calculate the value of sundry expenses using the information given. We know that returns inwards are ₦1500, so 150% of returns inwards is: 150/100 x 1500 = ₦2250 We also know that debtors are ₦900, so 50% of debtors is: 50/100 x 900 = ₦450 Therefore, the value of sundry expenses is: ₦2250 + ₦450 = ₦2700 We can now fill in this value in the information given, and find the missing value: Returns inwards............₦1500 Cash.......................₦1550 Discount...................₦2850 Capital....................₦3800 Debtors....................₦900 Sundry.....................₦2700 To find the missing value, we need to use the basic accounting equation: Assets = Liabilities + Owner's Equity We can rearrange this equation to solve for the missing value: Assets - (Liabilities + Owner's Equity) = 0 We know the value of all the items except for "sundry", which we just calculated to be ₦2700. Plugging in the numbers, we get: (₦1500 + ₦1550 + ₦2850 + ₦3800 + ₦900 + ₦2700) - 0 = N Simplifying this expression, we get: ₦12400 = N Therefore, the missing value, which is the value of "sundry", is ₦12400. Answer: ₦2700

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........................1/7/2005............30/6/2006

Drawings.....................................₦3 000

Capital.................25 000...............₦42 500

Furniture...............6 500...............₦10 200

Additional capital during the year amounts to 300% of the drawings.

What is the amount of the additional capital?

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The additional capital is calculated as 300% of the drawings, which is equal to 3 times the amount of the drawings. From the information given, the drawings amount to ₦3,000 for the year. Therefore, the additional capital is calculated as 3 x ₦3,000 = ₦9,000. So, the amount of additional capital is ₦9,000.

(i) Facilitating the preparation of final accounts

(ii) Making the existence of error easy to detect

(iii)Checking the accuracy of positions periodically.From the above, which of the following are among the uses of control accounts?

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An accounting ratio that considers only quick assets to determine the short-term safety margin of a firm is the?

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The accounting ratio that considers only quick assets to determine the short-term safety margin of a firm is called the acid test ratio. Quick assets are current assets that can be easily converted into cash, such as cash, marketable securities, and accounts receivable. The acid test ratio is a measure of a company's ability to pay off its current liabilities using only its quick assets. The formula for calculating the acid test ratio is as follows: Acid test ratio = (Quick assets / Current liabilities) A high acid test ratio indicates that a company has sufficient quick assets to cover its current liabilities, which are debts that are due within a year. This indicates that the company is in a good financial position to meet its short-term obligations. In summary, the acid test ratio is an important measure of a company's short-term liquidity and financial strength, and it helps investors and creditors assess the company's ability to meet its obligations in the short-term.

A company has departments X, Y and Z. Department X occupies a space of Y while Z occupies half the space of Y. If the company pays ₦70 000 on rent, what is the amount of rent that should be allocated to Y?

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Given:

Bank overdraft..............₦2000

Cash........................₦2000

Furniture...................₦4000

Calculate the total amount on the credit side of the trial balance?

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Goods worth N50 000 were sent at different times from head office to the branch during the year. By the end of the period, only N40 000 worth of goods had arrived at the branch. Which of the following is correct about the treatment of this transaction?

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Use the information below to answer questions ........................1/7/2005............30/6/2006Drawings.....................................₦3 000

Capital.................25 000...............₦42 500

Furniture...............6 500...............₦10 200Additional capital during the year amounts to 300% of the drawings.

Calculate the net profit or loss made during the year.

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Expense paid during the conversion of a partnership to a company are

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The federal government approved ?140m to local governments W, X, Y and Z. The amount is to be shared on the basis of 40% equality, 35% population and 25% internal revenue generation. Calculate the share of local government W on equality?

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The share of local government W on equality can be calculated as follows: Share on equality = 40% of ₦140m = (40/100) x ₦140m = ₦(40/100) x 140,000,000 = ₦56,000,000 Therefore, the share of local government W on equality is ₦56m.

If the discount allowed is 2.5% of sales, calculate the closing balance in the sales ledger account

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Net loss.......................₦2300

Capital........................₦10500

Liabilities....................₦7200

What will be the equity of the business?

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(i) Profits and looses will be shared unequally.

(ii) Interest is not allowed on capital.

(iii) Salaries are not allowed.

(iv) Interest is charged on drawings.

From the above, which of the following would apply where there is no agreement during partnership formation?

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A company's authorized share capital was one million ordinary shares at ₦1 each. Issued 80% of its shares at ₦1.10 per share. 70k was payable on application, 25k on allotment, 10k due on first call and the balance on second call.

The total amount of money received on application was?

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Given:Opening capitaL................₦7 000

Additional capital.............₦3 500

Net............................₦2 500

Closing........................₦10 250The drawings for the period stand at?

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To find out the drawings for the period, we need to calculate the difference between the opening capital and the closing capital, while taking into consideration any additional capital introduced during the period. The calculation is as follows: Opening capital + Additional capital - Drawings = Closing capital Substituting the given values, we have: ₦7,000 + ₦3,500 - Drawings = ₦10,250 Solving for Drawings, we get: Drawings = ₦7,000 + ₦3,500 - ₦10,250 = ₦10,500 - ₦10,250 = ₦250 Therefore, the amount of drawings for the period is ₦250. Option C - ₦2500 is incorrect as it is the value of the net, not the drawings. Option D - ₦2570 is also incorrect as it is neither a given value nor the correct calculation.

Partners' share of profit is credited to

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If cheques of ₦40 000 were received but a cheque of ₦8 000 was dishonoured, the amount owed was

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Debtors.................................₦20

Provision for bad debts..................10%

Provision for discount on debtors........5%

The provision for bad debt is?

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Use the information below to answer question An asset was purchase for ₦343m in 2003.

The estimated life of the asset was 3 years with a residual value of ₦28m.Using the straight method. The depreciation of the asset in the first year was?

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To calculate the depreciation of an asset using the straight-line method, you subtract the residual value from the initial cost and divide the result by the estimated life of the asset in years. So, for this asset: - The initial cost was ₦343m - The estimated life of the asset was 3 years - The residual value was ₦28m Subtracting the residual value from the initial cost gives: ₦343m - ₦28m = ₦315m Dividing ₦315m by the estimated life of the asset gives us: ₦315m / 3 years = ₦105m per year Therefore, the depreciation of the asset in the first year using the straight-line method is ₦105m. So, the correct answer is option C: ₦105m.

If Mr. Ajasin paid his creditors ₦5000 out of ₦20 000 owed, what would be the effect of this transaction on the accounting equation?

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When Mr. Ajasin paid his creditors ₦5000 out of the total amount owed ₦20,000, it means that the company's liabilities decreased by ₦5000 since they were able to pay off some of their debts. This transaction would have no effect on the total assets since the money used to pay off the creditors was already accounted for as a liability. Thus, there is no change in the total assets of the company. Therefore, the correct answer is: "A decrease in the total liabilities by ₦5000".

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Lighting..................₦2925

Rent......................₦2640

Salary....................₦4050

The expenses are for three different product:

Zema, Zeta and Zera. They are appointed on the basis of population. 4500 units of the products are produced, out of which 1260 and 2060 units are for zema and zeta respectively.

Find the salary charged to Zera product?

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To calculate the salary charged to the Zera product, we need to first find the proportion of the total production that is allocated to Zera. Total production = 4500 units Production allocated to Zema = 1260 units Production allocated to Zeta = 2060 units Production allocated to Zera = Total production - Production allocated to Zema - Production allocated to Zeta Production allocated to Zera = 4500 - 1260 - 2060 Production allocated to Zera = 1180 units Now, we need to allocate the total salary expenses to the three products based on their production proportion. Total salary expenses = ₦4050 Proportion of salary expenses for Zema = (1260/4500) x ₦4050 = ₦1134 Proportion of salary expenses for Zeta = (2060/4500) x ₦4050 = ₦1860 Proportion of salary expenses for Zera = (1180/4500) x ₦4050 = ₦1056 Therefore, the salary charged to the Zera product is ₦1056. Hence, option (C) is the correct answer.

Given:

Calculate the surplus income.

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One of the benefits of book-keeping records is that they?

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Balance as per cash book................?13560

Unpresented cheques.....................?5120

Uncredited lodgements...................?2300

Dividend received not entered

In the cash book........................?2000

Bank charges............................?280

Standing order payments.................?600

Balance as per bank statement............?

Calculate the balance in the bank statement.

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Stock valuation is useful because it forms the sales department on the?

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The statement "Stock valuation is useful because it forms the sales department on the prices that will affect profitability" is incorrect and doesn't make sense. Stock valuation is the process of determining the value of a company's inventory, which is typically one of the largest assets on its balance sheet. The valuation of stock helps a business to know the value of its inventory at any given point in time. By knowing the value of its inventory, a business can make informed decisions about its production, marketing, and sales strategies. For example, if the stock valuation is low, it may indicate that the business is producing too many goods or is holding onto too much inventory. In this case, the business may need to adjust its production or sales strategies to increase sales and reduce the inventory levels. Stock valuation can also help a business to determine the cost of goods sold, which is a key factor in calculating profitability. By knowing the cost of goods sold, a business can determine the prices it needs to charge for its products to make a profit. Therefore, stock valuation is useful because it helps a business to make informed decisions about its production, marketing, and sales strategies based on the value of its inventory. It also helps a business to determine the cost of goods sold, which is important in calculating profitability.

The amount of subscriptions accrued is reported in the balance sheet under?

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The amount of subscriptions accrued is reported in the balance sheet under the current liability. This is because subscriptions are considered as an obligation that the company owes to its subscribers, which must be fulfilled within the short-term period, usually one year or less. As a result, it is classified as a current liability, which is a debt or obligation that is expected to be settled within a year or the operating cycle of the business.

A pension granted to any past president or vice-president shall be charged to the

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A pension granted to any past president or vice-president is a payment made to these individuals after they have left office. The source of funding for these pensions is outlined in the constitution of the country. In many countries, including Nigeria, the constitution stipulates that pensions for past presidents or vice-presidents should be charged to a special pension fund. This fund is set up specifically to provide for the payment of these pensions. Therefore, the correct answer to the question is a special pension fund.

the receipt and payment s acpunt of a not-for-profit-making organization plays a similar role in a profit-making organization as?

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Balance as per cash book................₦13560

Unpresented cheques.....................₦5120

Uncredited lodgements...................₦2300

Dividend received not entered

In the cash book........................₦2000

Bank charges............................₦280

Standing order payments.................₦600

Balance as per bank statement............?

What is the adjusted cash book balance?

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The adjusted cash book balance is ₦14,680. To calculate the adjusted cash book balance, we start with the balance as per cash book, which is given as ₦13,560. We then make adjustments for the unpresented cheques and uncredited lodgements. Subtracting the unpresented cheques of ₦5,120 from the balance as per cash book gives ₦8,440. We then add the uncredited lodgements of ₦2,300 to get ₦10,740. Next, we add the dividend received of ₦2,000 that was not entered in the cash book to get ₦12,740. We then subtract the bank charges of ₦280 and the standing order payments of ₦600 to get the adjusted cash book balance of ₦14,680. Therefore, the adjusted cash book balance is ₦14,680, which is option (i).

The purchases ledger control account showed a credit balance of ₦525 000 on April 30, 2006.

This amount shows?

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The purchases ledger control account showed a credit balance of ₦525 000 on April 30, 2006. This amount shows what a business enterprise owed its creditors. A purchases ledger control account is used to record the total amount owed to all creditors by a business enterprise. The credit balance in this account indicates that the total amount owed to creditors is less than the total amount paid to them by the enterprise. This situation arises when the enterprise has made more payments to its creditors than the total amount owed to them.

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If the discount allowed is 2.5% of sales, calculate the closing balance in the sales ledger account

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In the trading and profit and loss account of a manufacturing organization, purchases are?

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Journal proper is used in recording?

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Journal proper is used in recording transactions that are not regular or that cannot be recorded in any other type of journal. It is also known as a general journal, and it is used for transactions such as adjusting entries, correcting entries, and other unique transactions that do not fit into the regular sales, purchases or cash journals. Journal proper is a very important part of the accounting system, as it allows for the proper recording of all transactions that occur in a business. By using a journal proper, a business can ensure that all transactions are recorded accurately, which helps in the preparation of financial statements and other reports.

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Given:

Returns inwards............₦1500

Cash.......................₦1550

Discount...................₦2850

Capital....................₦3800

Debtors....................₦900

Sundry.....................N?

The value of sundry expenses is 150% of returns inwards plus 50% of debtors

The total of the trial balance is?

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A sole trader purchased goods in cash worth ₦2000 at 2% discount and made a cash sale of ₦1000 at the same rate of discount. Determine the amount of discount allowed?

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The process whereby a cheque received by one person is given to another is known as?

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Entrance fees.........................₦1200

Subscriptions(including ₦850 arrears).₦4310

Donations received....................₦1500

Proceeds from sales...................₦2300

Total payments........................₦8200

Depreciation..........................₦2100

Closing cash balance..................₦1110

The club deposited 200% of the closing cash balance in he bank during the period.

Calculate the total figure for the receipt and payments account?

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A pension granted to any past president or vice-president shall be charged to the?

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Given:

Calculate the surplus income.

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Use the information below to answer question Debtors.................................₦20

Provision for bad debts..................10%

Provision for discount on debtors........5%Determine the amount provided for discount allowed on debtors?

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Given:

Shaku Company Ltd.

Stock..........................₦3600 000

Cash at hand...................₦800 000

Cash at bank...................₦2400 000

Debtors........................₦580 000

Trade creditors................₦920 000

Bank overdraft.................₦200 000

Tax liabilities................₦600 000

Salary owed to staff...........₦180 000

Determine the working capital?

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Partners' share of profit is credited to

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Given:

Prepaid b/f.......................?10 000

Cash paid during the year.........?20 000

The amount to be charged to the profit and loss account is?

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The fourth stage of the accounting information system is?

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The gross profit disclosed in the branch stock adjustment account represents?

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Net loss.......................₦2300

Capital........................₦10500

Liabilities....................₦7200

Find the value of the total assets?

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Use the information below to answer questions.Entrance fees.........................₦1200

Subscriptions(including ₦850 arrears).₦4310

Donations received....................₦1500

Proceeds from sales...................₦2300

Total payments........................₦8200

Depreciation..........................₦2100

Closing cash balance..................₦1110The club deposited 200% of the closing cash balance in he bank during the period.Determine the opening cash balance of the

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Osei and Yabo were in partnership sharing profits and losses in the ratio of 2:3. On admitting Takwa, the profit and loss sharing ratio was charged to 1:1:1. Suppose Takwa paid ₦30 000 for goodwill , this amount would be?

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