Principles Of Accounts 2005 Jamb Examination
Question 11
Straight-line depreciation per annum = 20% × ₦120,000 = ₦24,000.
Time from 1/1/1996 to 30/6/1999 = 3.5 years.
Accumulated depreciation = ₦24,000 × 3.5 = ₦84,000.
Correct option: D.
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Question 12
Use the information to answer the question: A piece of equipment costing ₦120,000 was purchased on 1/1/1996. Depreciation was provided at 20% per annum on a straight-line basis. It was sold on 30/6/1999 for ₦31,500.
The net book value of the piece of equipment at the time of sale was?
From Q16, accumulated depreciation to date of sale = ₦84,000.
Cost = ₦120,000 ⟹ NBV = ₦120,000 − ₦84,000 = ₦36,000.
Correct option: C.
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Question 13
The Bought (Purchases) Ledger Control Account summarizes creditors. Typical entries include credit purchases (credit), and reductions such as returns outwards and discount received (debit). Hence: discount received, returns outwards, purchases.
Correct option: D.
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Question 14
Purchases ledger balance = ₦4,000
Purchases for the period = ₦50,000
Cash refunded by suppliers = ₦290
Cheques paid to suppliers = ₦42,300
Returns outwards = ₦2,000
Discount received from suppliers = ₦400
The balance of the purchases ledger control account is?
Start with opening credit balance (₦4,000) and add credit purchases (₦50,000): ₦54,000.
Deduct debits (reduce payables): cheques ₦42,300, returns outwards ₦2,000, discount received ₦400, refund from suppliers ₦290.
Total debits = ₦42,300 + ₦2,000 + ₦400 + ₦290 = ₦44,990.
Closing balance = ₦54,000 − ₦44,990 = ₦9,010 (credit).
Correct option: D.
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Question 15
Which of the following items is found on the credit side of the Sales Ledger Control Account?
The Sales Ledger Control Account (debtors control) is debited with credit sales and credited with items that reduce debtors: cash received, returns inwards, discount allowed, and transfer to bills receivable. Thus, “Bills receivable” appears on the credit side.
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Question 16
Capital = Assets − Liabilities = ₦17,200 − ₦5,120 = ₦12,080.
Correct option: C.
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Question 17
Use the information below to answer questions
Zazzau Company:
Cash in hand................N50
Cash in bank................N1 250
Stock.......................N4 880
Furniture...................N9 60
Building....................N5 500
Debtor......................N1 750
Creditors...................N2 150
Drawings of N125 were made by the shareholders of the company.
The capital of the company stands at?
Capital means the assets and cash in a business. It may either be cash, machinery, receivable accounts, property, or houses.
50 + 4880+ 1750 + 1250 + 960+ 5500 = 14390
14390 - 2150 = 12240
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Question 18
Use the information below to answer questions
Zazzau Company:
Cash in hand................N50
Cash in bank................N1 250
Stock.......................N4 880
Furniture...................N9 60
Building....................N5 500
Debtor......................N1 750
Creditors...................N2 150
Drawings of N125 were made by the shareholders of the company.
The capital of the company stands at?
Current assets = Cash in hand 50 + Cash in bank 1,250 + Stock 4,880 + Debtors 1,750 = ₦7,930.
Net current assets = Current assets − Current liabilities = ₦7,930 − ₦2,150 = ₦5,780.
Correct option: A.
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Question 19
Overhead costs are indirect costs such as rent, utilities, depreciation, insurance, etc. Rent is a component of manufacturing overhead.
Correct option: D.
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Question 20
Use the information below to answer questions
Direct labour...................N50 000
Beginning work-in-progress......N4 000
Raw materials used..............N18 000
Indirect labour.................N4 000
Ending finished goods...........N16 000
Ending work-in-progress.........N9 000
Factory supplies used...........N7 000
Selling expenses................N25 000
Beginning finished goods........N21 000
Other factory overheads.........N19 000
What is the cost of goods manufactured?
Prime cost = Direct labour ₦50,000 + Raw materials ₦18,000 = ₦68,000.
Add indirects (overheads): Indirect labour ₦4,000 + Factory supplies ₦7,000 + Other overheads ₦19,000 = ₦30,000.
Total manufacturing cost = ₦68,000 + ₦30,000 = ₦98,000.
Add opening WIP ₦4,000 = ₦102,000.
Less closing WIP ₦9,000 = ₦93,000 (factory cost).
But including finished goods adjustment: Opening FG ₦21,000 + COGM − Closing FG ₦16,000 = 98,000
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