2022 - JAMB Accounting Past Questions and Answers - page 2

The authority warrant issued prior to the approval of the appropriate bill at the beginning of the year is known as a provisional general warrant.

A provisional general warrant allows for the expenditure of funds before the approval of the formal budget or appropriate bill. It is a temporary authorization that ensures essential expenses can be covered before the official budget is passed or approved. This helps in facilitating the smooth functioning of government operations, particularly in situations where a delay in budget approval might hinder essential activities.

The asset value at the beginning of the third year can be calculated using the straight-line depreciation method. The formula for straight-line depreciation is:

\[ \text{Depreciation per year} = \frac{\text{Cost of Asset} - \text{Residual Value}}{\text{Estimated Life}} \]

In this case:
\[ \text{Depreciation per year} = \frac{N343m - N28m}{3 \text{ years}} \]

\[ \text{Depreciation per year} = \frac{N315m}{3 \text{ years}} = N105m \]

Now, to find the asset value at the beginning of the third year:
\[ \text{Asset value at the beginning of third year} = \text{Cost of Asset} - (\text{Depreciation per year} \times \text{Number of Years}) \]

\[ \text{Asset value at the beginning of third year} = N343m - (N105m \times 2) \]

\[ \text{Asset value at the beginning of third year} = N343m - N210m = N133m \]

Therefore, the correct answer is N133m.

To find the cost of goods sold (COGS), we can use the formula:

\[ \text{COGS} = \text{Sales} - \text{Gross Profit} \]

Given that the gross profit margin is 20%, we can calculate the gross profit as 20% of the sales:

\[ \text{Gross Profit} = 0.20 \times \text{Sales} \]

\[ \text{Gross Profit} = 0.20 \times N10,600 \]

\[ \text{Gross Profit} = N2,120 \]

Now, we can find the cost of goods sold:

\[ \text{COGS} = \text{Sales} - \text{Gross Profit} \]

\[ \text{COGS} = N10,600 - N2,120 \]

\[ \text{COGS} = N8,480 \]

Therefore, the correct answer is N8,480.

The stock valuation data is important because it enables management to determine the cost of stock at the end of the business. Stock valuation involves assessing the value of the inventory or stock held by a business at a specific point in time. This information is crucial for financial reporting, as it allows management to accurately calculate the cost of goods sold (COGS) and the value of the remaining stock.