2022 - JAMB Accounting Past Questions and Answers - page 3

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.

The correct answer is: * **B. branch stock account account and credited to the goods sent to branch account** Here's the explanation: When goods are sent from the head office to a branch, the branch stock account is debited to increase the value of stock at the branch. The goods sent to the branch account is credited to reflect the decrease in stock at the head office. This is because the head office is essentially "selling" goods to the branch.

Gross profit is a measure of profitability derived from a company's trading activities. It represents the difference between revenue and the cost of goods sold. The branch adjustment account's gross profit needs to be transferred to an account that shows the final profit or loss for the branch. The profit and loss account is where revenues, cost of goods sold, and other expenses are summarized to determine the net profit or loss.

The accounting equation represents the fundamental principle of accounting, which states that the total assets of a business are equal to the total liabilities and owner's equity. In this case:

Total assets (N1500) = Total liabilities (N500) + Owner's equity (N1000)

So, N1000 (Owner's equity) + N500 (Liabilities) = N1500 (Assets), which is expressed as Option C.

To calculate the unrealized profit, you need to determine the profit margin on the goods transferred from department Y to X and then find out how much profit would have been recognized if all the goods were sold. 

1. Profit Margin = 25% (0.25 in decimal form)

2. Value of goods transferred = N10,000

3. Profit on transferred goods = Profit Margin * Value of goods transferred
   = 0.25 * N10,000
   = N2,500

Since N10,000 worth of goods was not sold, the unrealized profit is the same as the profit on those unsold goods, which is N2,500 

Here's how to calculate the balance of the ordinary share capital account: 1. **Calculate the total value of shares issued:** The question states 20,000 ordinary shares of N1.50 were issued. However, the question provides the information regarding the 1,500 shares only. The amount to be recorded is the amount received for the 1,500 shares. 2. **Calculate the amount received on application:** * Number of shares = 1,500 * Application money per share = N0.40 * Total application money received = 1,500 shares \* N0.40 = N600 3. **Calculate the amount received on allotment:** *

To determine the sales figure, you need to calculate the change in the total debtors balance from the beginning of the period to the end of the period. The formula to calculate sales is:

Sales = Total debtors b/d + Cheques received from debtors - Total debtors c/d

Given the information:

Total debtors b/d (beginning balance) = N25,000
Cheques received from debtors = N255,000
Total debtors c/d (closing balance) = N15,000

Now, plug these values into the formula:

Sales = N25,000 (beginning balance) + N255,000 (cheques received) - N15,000 (closing balance) = N265,000

So, the sales figure is N265,000.

 

The excess of income over expenditure represents profit (in a business) or surplus (in a non-profit organization). This surplus increases the owner's equity or the organization's net assets. * **Accumulated fund:** This is the account where the surplus is transferred to increase the net assets of a non-profit organization. * **Profit and loss account:** This is the account used to calculate profit or loss; the balance is then transferred elsewhere. * **Current assets/liabilities in the balance sheet:** These represent short-term assets and obligations, not the long-term result of operations.

Let's recalculate the Net Working Capital:

Net Working Capital = Current Assets - Current Liabilities

Using the information provided:

Net Working Capital = N110m (Current Assets) - N20m (Current Liabilities)  
Net Working Capital = N90m

So, the correct option is N90m.

Absorption is the correct answer. When one company acquires another and the acquired company ceases to exist as a separate entity, it is termed absorption. The assets and liabilities of the absorbed company are transferred to the acquiring company.