Given: PTF Trial Balance [Extract] as at 31 December, 1999 Dr Cr N'000 N '000 Cash 2,000 Investments 3,000 Accounts receivable 6,000 11,000 Fund balance 11,...

Assessment: JAMB UTME - Principles of Accounts - 2001 Subject: Financial Accounting

Question 1 Report

Given:

PTF Trial Balance [Extract] as at 31 December, 1999

Dr Cr

N'000 N '000

Cash 2,000

Investments 3,000

Accounts receivable 6,000 11,000

Fund balance 11,000 11,000

Assuming all the investments realized ₦4m, what will be the endig fund balance?

Answer Details
The total value of investments is given as ₦3m in the extract. However, assuming all investments are sold for ₦4m, this means there will be a gain of ₦1m. This gain will increase the Fund balance, which is part of the Capital of the organization. Thus, the new Fund balance will be the previous Fund balance (₦11m) plus the gain from the investments (₦1m), giving a new Fund balance of ₦12m. Therefore, the ending Fund balance will be ₦12m. Option (c) is the correct answer.
Read lesson note on Nature And Significance Of Accounting (JAMB)
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