Use the information below to answer the question:
| Liabilities ₦ |
Assets ₦ |
| Capital 40,000 |
Furnishing 10,000 |
| |
Ceiling Fan 1,500 |
| |
Cash in Hand 28,500 |
| 40,000 |
40,000 |
If at 31/1/95 the following information was ascertained
(i) rent for shop ₦12,000 paid for the year
(ii) Total purchases ₦15,000
(iii) Total sales ₦8,200
(iv) Stock of goods left ₦10,000
(v) paid sales boy ₦500
To determine the total value of the assets after the transactions, we need to add up all the values of the assets and also add the values of the transactions that increased the value of the assets, then we will subtract the values of the transactions that reduced the value of the assets.
From the information given in the question, the total value of the assets before the transactions is ₦40,000.
Now let's calculate the effect of each transaction:
(i) Rent for shop ₦12,000 paid for the year: This is a prepaid expense, so we need to deduct ₦12,000 from the cash in hand and add it to the value of furnishing. Therefore, the value of the assets after this transaction is:
Cash in hand = ₦28,500 - ₦12,000 = ₦16,500
Furnishing = ₦10,000 + ₦12,000 = ₦22,000
(ii) Total purchases ₦15,000: This is an increase in the value of the stock of goods left. Therefore, the value of the assets after this transaction is:
Stock of goods left = ₦10,000 + ₦15,000 = ₦25,000
(iii) Total sales ₦8,200: This is a decrease in the value of the stock of goods left and an increase in the cash in hand. Therefore, the value of the assets after this transaction is:
Stock of goods left = ₦25,000 - ₦8,200 = ₦16,800
Cash in hand = ₦16,500 + ₦8,200 = ₦24,700
(iv) Stock of goods left ₦10,000: This is the value of the stock of goods left after the purchases and sales. Therefore, the value of the assets after this transaction is:
Stock of goods left = ₦16,800 - ₦10,000 = ₦6,800
(v) Paid sales boy ₦500: This is a decrease in the cash in hand. Therefore, the value of the assets after this transaction is:
Cash in hand = ₦24,700 - ₦500 = ₦24,200
Finally, we add up all the values of the assets to get the total value of the assets after the transactions:
Total value of assets = ₦22,000 + ₦1,500 + ₦6,800 + ₦24,200
Total value of assets = ₦54,500
Therefore, the option that represents the total value of the assets after the transactions is ₦41,700.