Use the following information to answer the question given \(\begin{array}{c|c} \text{Jan. 1} & \text{₦}\\ \hline \text{1/1/08 Capital introduced by cash} &...
Question 1 Report
Use the following information to answer the question given
\(\begin{array}{c|c} \text{Jan. 1} & \text{₦}\\ \hline \text{1/1/08 Capital introduced by cash} & 50,000 \\ \text{2/1/08 Bought goods for retail by cash} & 10,000\\ \text{3/1/08 Sold fixtures by cash} & 5,000\\ \text{4/1/08 Sold goods to Lagbaja on credit} & 3,000\\ \text{5/1/08 Bought goods on credit from Tamedu}& 8,000\end{array}\)
Balance in Purchases account at 5/1/08 is
Answer Details
The balance in the purchases account at 5/1/08 can be calculated as follows:
Purchases = Cost of goods sold + Closing stock - Opening stock
From the given information, we know that goods were bought for ₦10,000 on 2/1/08 and on credit for ₦8,000 on 5/1/08. Therefore, the total purchases for the period is ₦18,000 (₦10,000 + ₦8,000).
Since no information was given about the cost of goods sold or the value of the opening and closing stock, we cannot calculate the exact value of the purchases account balance. However, we do know that the balance of the purchases account should be equal to the total purchases made during the period.
Therefore, the answer is ₦18,000.
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