Principles Of Accounts 2006 Jamb Examination

The question text is ambiguous (four sales figures given but three departments named).
To answer, we assume the intended sales for S, T and U are N20,000; N40,000; and N60,000 respectively (dropping the duplicate N20,000).
Total sales = 20,000 + 40,000 + 60,000 = 120,000. T's proportion = 40,000/120,000 = 1/3. T's share of N12,000 commission = 12,000 × 1/3 = N4,000. 

Calculation of Profit 

Determine the relationship between cost, profit, and selling price 
The goods are sent at cost plus a mark-up of 25%.
This means that the profit is 25%  of the cost. The selling price, which is the value at which the goods are debited to the branch stock account, represents the cost plus the profit. 

Express the selling price in terms of cost 
If the cost is represented by C, then the profit is 0.25C.

The selling price, S, is therefore given by the formula:

S = C + 0.25C = 1.25 C.

Calculate the cost of the goods 
The debit to the branch stock account is N40,000N, which represents the selling price. 

\[ C = \dfrac{S}{1.25} \]

\[ C = \dfrac{40000}{1.25} \]

= 32000

. Calculate the profit 

The profit is the difference between the selling price and the cost. It can be calculated using the formula:

Profit = S − C = N40,000 − N32,000 = N8,000

Explanation: A cash book is a book of original entry (it records cash receipts and payments like a journal) and at the same time serves as a ledger (it shows the running cash and bank balances). Therefore the cash book functions as both journal and ledger. Correct = option D.

\[ \text{Total Receipts} = \text{N }4{,}000 + \text{N }1{,}000 + \text{N }200 + \text{N }2{,}500\]

\[ \text{Total Receipts} = \text{N }7{,}700\]

\[ \text{Less: Purchases (1/28)} = \text{N }1{,}500\]

\[ \text{Closing Cash Balance} = \text{N }7{,}700 - \text{N }1{,}500 = \boxed{\text{N }6{,}200}\]  

B. N6 500

Start with opening balance N10,000.
Apply successive entries as shown: debit N1,000 → 9,000;
ebit N1,500 → 7,500; debit N500 → 7,000; credit N3,000 → 10,000.
Finally debit N1,500 on Jan 30 gives closing balance Y = 10,000 − 1,500 = N8,500. 

X is a debit entry of N1,500 that reduces the ledger balance.
In a bank/customer ledger this pattern is consistent with bank charges which are debited by the bank and reduce the account balance.
An unpresented cheque would not be entered on the bank ledger as a debit here; dividends are usually credit items to a bank account when paid; an uncredited cheque would not appear as a debit. Hence X represents bank charges. 

Sales revenue = (8,000 × 3.50) + (23,000 × 4.00) = 28,000 + 92,000 = N120,000.

Cost of goods available for sale = Opening stock (2,000 × 2.00 = 4,000) + Purchases (10,000 × 2.50 = 25,000) + (20,000 × 3.00 = 60,000)

= 4,000 + 85,000 = N89,000. COGS = Cost available − Closing stock = 89,000 − 19,000 = N70,000.

Gross profit = Sales − COGS = 120,000 − 70,000 = N50,000. Correct = option B.

Total units available = 2,000 + 10,000 + 20,000 = 32,000. Total units sold = 8,000 + 23,000 = 31,000. Closing units = 1,000.

Under LIFO latest purchases are issued first (sales consume Sept then Aug then opening).

Remove 20,000 (Sept) + 10,000 (Aug) + 1,000 from opening = 31,000 consumed, leaving 1,000 units from opening stock valued at cost ₦2.00 each → closing stock = 1,000 × 2.00 = N2,000.