Principles Of Accounts 2007 Jamb Examination

Subscriptions accrued (also known as subscriptions in arrears) refer to money that members of a club or society owe the organisation for the current accounting period but have not yet paid. Since this represents money that is legally owed to the organisation and is expected to be received within the next twelve months, it is classified as a current asset. In contrast, subscriptions received in advance would be classified as a current liability.

The expenses are apportioned based on the production 'population' (the number of units). To find the amount for Zema, we use the ratio of Zema's units to the total units produced.

Given:
Total Units = 4500
Zema Units = 1260
Total Lighting Cost = N2,925

The calculation is as follows:\[\text{Zema Lighting} = \left( \frac{\text{Units of Zema}}{\text{Total Units}} \right) \times \text{Total Lighting Cost}\]\[\text{Zema Lighting} = \left( \frac{1260}{4500} \right) \times 2,925\]\[\text{Zema Lighting} = 0.28 \times 2,925 = 819\]Therefore, the amount of lighting charge allocated to Zema is N819.

First, we must determine the number of units produced for Zera by subtracting the units of Zema and Zeta from the total production:
Total Units = 4500
Zema = 1260
Zeta = 2060\[\text{Zera Units} = 4500 - (1260 + 2060)\]\[\text{Zera Units} = 4500 - 3320 = 1180\]Next, we apportion the total salary (N4,050) based on Zera's share of the total population:\[\text{Zera Salary} = \left( \frac{\text{Units of Zera}}{\text{Total Units}} \right) \times \text{Total Salary}\]\[\text{Zera Salary} = \left( \frac{1180}{4500} \right) \times 4,050\]\[\text{Zera Salary} = 0.26222... \times 4,050 = 1,062\]The salary charged to the Zera product is N1,062.

The Branch Stock Adjustment Account is used when goods are sent to a branch at an invoice price (cost plus a mark-up). This account is designed to eliminate the 'loading' (the profit element added by the head office) from the branch stock to arrive at the actual profit. The balance of this account, after adjusting for the loading on opening and closing stocks, represents the actual gross profit earned by the branch's operations. This is specifically termed the branch profit.

In partnership accounting, after the net profit is determined in the Profit and Loss Account, it is transferred to the Profit and Loss Appropriation Account to be divided among partners. Once the share of profit for each partner is calculated, it is recorded in the partners' individual accounts. If the firm maintains 'Fixed Capital Accounts,' the share of profit is credited to the Partner's Current Account. If the firm uses 'Fluctuating Capital Accounts,' it is credited directly to the Capital Account. However, in standard examination contexts where both are listed, the Current Account is the specific destination for annual profit distributions to keep the capital intact.

In accordance with the Constitution of the Federal Republic of Nigeria, the remuneration, salaries, and allowances of certain high-ranking public officials—including the President and Vice-President—are charged directly to the Consolidated Revenue Fund (CRF). This includes pensions granted to them upon leaving office. Charging these payments to the CRF ensures they are treated as 'statutory expenditure,' meaning they do not require an annual vote by the legislature, thereby guaranteeing the financial independence and security of the executive leadership.

To solve this, we first determine the total amount allocated for the 'equality' criterion and then divide that amount equally among the four local governments (W, X, Y, and Z).

First, calculate the total equality portion:\[\text{Equality Portion} = 40\% \text{ of } N140,000,000\]\[\text{Equality Portion} = 0.40 \times 140,000,000 = N56,000,000\]Since there are four local governments sharing this specific portion equally:\[\text{Share of W} = \frac{N56,000,000}{4}\]\[\text{Share of W} = N14,000,000\]Thus, local government W receives N14m based on the equality factor.

Stock valuation (inventory valuation) is critical for determining the Cost of Goods Sold (COGS) and the value of closing stock. From a sales and management perspective, knowing the value of stock helps the department understand the underlying costs of the products they are selling. If the valuation shows high costs, the sales department must adjust the selling prices to ensure they cover these costs and maintain the desired profit margin. Therefore, it directly informs the prices that will affect the overall profitability of the firm.

The Straight Line Method calculates depreciation by spreading the depreciable cost of an asset evenly over its useful life.

The formula is:\[\text{Annual Depreciation} = \frac{\text{Cost} - \text{Residual Value}}{\text{Useful Life}}\]Plugging in the given values:\[\text{Annual Depreciation} = \frac{343,000,000 - 28,000,000}{3}\]\[\text{Annual Depreciation} = \frac{315,000,000}{3} = 105,000,000\]In the first year, the depreciation expense is N105m.

To find the value at the beginning of the third year, we subtract the accumulated depreciation of the first two years from the original cost.

As calculated previously, the annual depreciation is:\[\text{Annual Depreciation} = \frac{343,000,000 - 28,000,000}{3} = 105,000,000\] Accumulated depreciation at the end of two years (which is the start of the third year) is:
Accumulated Depreciation = 105,000,000 x 2 = 210,000,000
The Net Book Value (NBV) at the beginning of year 3 is:
Value at start of Year 3 = Original Cost - Accumulated Depreciation
Value at start of Year 3 = 343,000,000 - 210,000,000 = 133,000,000