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WAEC SSCE - Financial Accounting - 1991 (Objective)

Question 1 Report

Use the following information to answer the given question
\(\begin{array}{c|c} & DR & CR \\ & N & N \\ \hline \text{Goodwill} & 10,000 & \\ \text{Plant and Machinery} & 32,000& \\ \text{Freehold premises} & 50,000& \\ stock & 15,000& \\ debtors & 12,500 & \\ \text{Cash in bank} & 7,500 & \\ \text{cash in hand} & 2,000 & \\ \text{Profit and loss account} & & 34,000 \\ \text{Accrued rent} & & 500 \\ \text{Sundry creditors} & & 9500 \\ Capital & \overline{129,000} & \overline{129,000}\end{array}\)
What is the value of fixed tangible assets?
Answer Details
To determine the value of fixed tangible assets, we need to look for the items listed in the balance sheet that fall under this category. Fixed tangible assets include items such as plant and machinery and freehold premises, but do not include items such as goodwill, stock, or debtors. From the given information, we can see that the value of plant and machinery is N32,000 and the value of freehold premises is N50,000. Therefore, the total value of fixed tangible assets is: N32,000 + N50,000 = N82,000 Therefore, the answer is option (C) N82,000. It's important to remember that fixed tangible assets are physical assets that have a long-term useful life and are used in the production of goods or services. These assets are not easily convertible to cash and are reported on the balance sheet at their historical cost less any accumulated depreciation.
Read lesson note on Nature And Significance Of Accounting (JAMB)
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