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Pregunta 1 Informe
(a) Outline two differences between bookkeeping and accounting
(b) List one source document used for each of the following transactions:
i. sales
ii. purchases
iii. cash deposit
iv. salary
v. returns outwards
(c) State three purposes of source documents
(a) Two differences between bookkeeping and accounting
| Bookkeeping | Accounting |
|---|---|
| It is the routine recording and classifying of financial transactions in the books. | It is wider: it summarises, analyses, interprets and communicates the recorded information. |
| It is largely clerical and mechanical work. | It requires greater skill, judgement and analysis. |
| It ends where the trial balance is drawn up. | It begins where bookkeeping ends, preparing and interpreting final accounts. |
(Any two.)
(b) One source document for each transaction
(c) Three purposes of source documents
(Any three.)
Detalles de la respuesta
(a) Two differences between bookkeeping and accounting
| Bookkeeping | Accounting |
|---|---|
| It is the routine recording and classifying of financial transactions in the books. | It is wider: it summarises, analyses, interprets and communicates the recorded information. |
| It is largely clerical and mechanical work. | It requires greater skill, judgement and analysis. |
| It ends where the trial balance is drawn up. | It begins where bookkeeping ends, preparing and interpreting final accounts. |
(Any two.)
(b) One source document for each transaction
(c) Three purposes of source documents
(Any three.)
Pregunta 2 Informe
Yallawa Stores Ltd has two departments. The following balances Were extracted from its books as at 31st December 2017.
| Purchases | Department A | 720,000 |
| Department B | 520,000 | |
| Rent and rates | 50,000 | |
| Commission | 55,000 | |
| Insurance | 5,000 | |
| Sales | Department A | 1,500,000 |
| Department B | 1,250,000 | |
| Discount received | 124,000 | |
| Advertising | 20,000 | |
| Salaries and wages | 250,000 | |
| Depreciation | 35,000 | |
| Administration and general expenses | 50,000 | |
| Opening stock | Department A | 150,000 |
| Department B | 100,000 | |
| CIosing stock | Department A | 175,000 |
| Department B | 142,000 |
Additional information: Expenses are to be apportioned to the departments as follows
i. commission on the basis of sales:
ii. salaries and wages - 3:2 for Department A and B respectively
iii. discount received - 10% of purchases
iv. other expenses are to be apportioned equally.
You are required to prepare a Departmental Trading, Profit, and Loss Account for the year ended 31st December 2017.
Approach. Each department is traded separately for gross profit, then indirect expenses are apportioned on the stated bases and charged against each department to find net profit.
Workings - apportionment of expenses
Departmental Trading, Profit and Loss Account for the year ended 31st December 2017
| Particulars | Dept A (N) | Dept B (N) | Total (N) |
|---|---|---|---|
| Sales | 1,500,000 | 1,250,000 | 2,750,000 |
| Opening stock | 150,000 | 100,000 | 250,000 |
| Add Purchases | 720,000 | 520,000 | 1,240,000 |
| Goods available | 870,000 | 620,000 | 1,490,000 |
| Less Closing stock | (175,000) | (142,000) | (317,000) |
| Cost of sales | 695,000 | 478,000 | 1,173,000 |
| Gross profit | 805,000 | 772,000 | 1,577,000 |
| Add Discount received | 72,000 | 52,000 | 124,000 |
| Total income | 877,000 | 824,000 | 1,701,000 |
| Less expenses: | |||
| Commission | 30,000 | 25,000 | 55,000 |
| Salaries and wages | 150,000 | 100,000 | 250,000 |
| Rent and rates | 25,000 | 25,000 | 50,000 |
| Insurance | 2,500 | 2,500 | 5,000 |
| Advertising | 10,000 | 10,000 | 20,000 |
| Depreciation | 17,500 | 17,500 | 35,000 |
| Admin and general | 25,000 | 25,000 | 50,000 |
| Total expenses | 260,000 | 205,000 | 465,000 |
| Net profit | 617,000 | 619,000 | 1,236,000 |
Check: total gross profit 1,577,000 + discount received 124,000 - total expenses 465,000 = net profit 1,236,000.
Detalles de la respuesta
Approach. Each department is traded separately for gross profit, then indirect expenses are apportioned on the stated bases and charged against each department to find net profit.
Workings - apportionment of expenses
Departmental Trading, Profit and Loss Account for the year ended 31st December 2017
| Particulars | Dept A (N) | Dept B (N) | Total (N) |
|---|---|---|---|
| Sales | 1,500,000 | 1,250,000 | 2,750,000 |
| Opening stock | 150,000 | 100,000 | 250,000 |
| Add Purchases | 720,000 | 520,000 | 1,240,000 |
| Goods available | 870,000 | 620,000 | 1,490,000 |
| Less Closing stock | (175,000) | (142,000) | (317,000) |
| Cost of sales | 695,000 | 478,000 | 1,173,000 |
| Gross profit | 805,000 | 772,000 | 1,577,000 |
| Add Discount received | 72,000 | 52,000 | 124,000 |
| Total income | 877,000 | 824,000 | 1,701,000 |
| Less expenses: | |||
| Commission | 30,000 | 25,000 | 55,000 |
| Salaries and wages | 150,000 | 100,000 | 250,000 |
| Rent and rates | 25,000 | 25,000 | 50,000 |
| Insurance | 2,500 | 2,500 | 5,000 |
| Advertising | 10,000 | 10,000 | 20,000 |
| Depreciation | 17,500 | 17,500 | 35,000 |
| Admin and general | 25,000 | 25,000 | 50,000 |
| Total expenses | 260,000 | 205,000 | 465,000 |
| Net profit | 617,000 | 619,000 | 1,236,000 |
Check: total gross profit 1,577,000 + discount received 124,000 - total expenses 465,000 = net profit 1,236,000.
Pregunta 3 Informe
(a) Explain the term fixed capital account.
(b) State three conditions that would result in a change in the profit and loss sharing ratio of a partnership.
(c) Outline three circumstances that would give rise to the creation of goodwill in a partnership
(a) Fixed capital account
A fixed capital account is a partner's capital account whose balance is kept unchanged (fixed) from period to period. Only the amount of capital originally contributed (and any later permanent introduction or withdrawal of capital) is recorded in it. All other regular items such as interest on capital, salary, share of profit, drawings and interest on drawings are not passed through this account; instead they are recorded in a separate current account for each partner. This keeps each partner's true capital contribution clearly shown at all times.
(b) Three conditions that would change the profit and loss sharing ratio
(Any three.)
(c) Three circumstances giving rise to the creation of goodwill
(Any three.)
Detalles de la respuesta
(a) Fixed capital account
A fixed capital account is a partner's capital account whose balance is kept unchanged (fixed) from period to period. Only the amount of capital originally contributed (and any later permanent introduction or withdrawal of capital) is recorded in it. All other regular items such as interest on capital, salary, share of profit, drawings and interest on drawings are not passed through this account; instead they are recorded in a separate current account for each partner. This keeps each partner's true capital contribution clearly shown at all times.
(b) Three conditions that would change the profit and loss sharing ratio
(Any three.)
(c) Three circumstances giving rise to the creation of goodwill
(Any three.)
Pregunta 4 Informe
(a)What is a not-for-profit making organization?
(b) Outline two differences between a for-profit organization and a not-for-profit making organisation.
(c) Explain the following sources of funding in a not-for-profit making organisation:
i. subscription
ii. life membership fee
iii. entrance fee
iv. donation
(a) What is a not-for-profit making organisation?
A not-for-profit making organisation is a body formed to provide services or promote the welfare and common interest of its members or the public, rather than to earn profit for owners. Examples include clubs, societies, associations, churches and charities. Any surplus it makes is ploughed back to further its aims and is not distributed to members.
(b) Two differences between a for-profit and a not-for-profit making organisation
| For-profit organisation | Not-for-profit making organisation |
|---|---|
| Its main aim is to earn profit for the owners. | Its main aim is to render service or promote members' welfare. |
| Prepares a Trading and Profit and Loss Account; result is net profit or net loss. | Prepares an Income and Expenditure Account; result is surplus or deficit. |
| Owner's stake is called capital. | Members' stake is called the Accumulated Fund. |
| Surplus is shared among owners as profit/dividend. | Surplus is retained to advance the organisation's objectives. |
(Any two.)
(c) Sources of funding explained
(i) Subscription: The periodic (usually annual) amount paid by members to enjoy the facilities of the organisation; it is the main recurring source of income.
(ii) Life membership fee: A single large payment that entitles a member to lifetime membership without paying further annual subscriptions. It is usually capitalised and spread over the member's expected life, being credited to the Accumulated Fund or transferred in instalments to income.
(iii) Entrance fee: A one-off fee paid by a new member on first joining, in addition to subscription. It may be treated as revenue income of the year or capitalised, depending on the club's rules.
(iv) Donation: A gift of money or property received by the organisation. A general (small) donation is treated as income of the year; a large or specific donation is capitalised and added to the Accumulated Fund.
Detalles de la respuesta
(a) What is a not-for-profit making organisation?
A not-for-profit making organisation is a body formed to provide services or promote the welfare and common interest of its members or the public, rather than to earn profit for owners. Examples include clubs, societies, associations, churches and charities. Any surplus it makes is ploughed back to further its aims and is not distributed to members.
(b) Two differences between a for-profit and a not-for-profit making organisation
| For-profit organisation | Not-for-profit making organisation |
|---|---|
| Its main aim is to earn profit for the owners. | Its main aim is to render service or promote members' welfare. |
| Prepares a Trading and Profit and Loss Account; result is net profit or net loss. | Prepares an Income and Expenditure Account; result is surplus or deficit. |
| Owner's stake is called capital. | Members' stake is called the Accumulated Fund. |
| Surplus is shared among owners as profit/dividend. | Surplus is retained to advance the organisation's objectives. |
(Any two.)
(c) Sources of funding explained
(i) Subscription: The periodic (usually annual) amount paid by members to enjoy the facilities of the organisation; it is the main recurring source of income.
(ii) Life membership fee: A single large payment that entitles a member to lifetime membership without paying further annual subscriptions. It is usually capitalised and spread over the member's expected life, being credited to the Accumulated Fund or transferred in instalments to income.
(iii) Entrance fee: A one-off fee paid by a new member on first joining, in addition to subscription. It may be treated as revenue income of the year or capitalised, depending on the club's rules.
(iv) Donation: A gift of money or property received by the organisation. A general (small) donation is treated as income of the year; a large or specific donation is capitalised and added to the Accumulated Fund.
Pregunta 5 Informe
(a) List;
i. Three books of accounts used In public sector accounting
ii. Four users of public sector accounting information.
(b) State four differences between the private sector accounting and the public sector accounting
(a)(i) Three books of accounts used in public sector accounting
(Any three. Others: revenue register, deposit register.)
(a)(ii) Four users of public sector accounting information
(Any four.)
(b) Four differences between private sector and public sector accounting
| Private sector accounting | Public sector accounting |
|---|---|
| Main objective is to determine profit or loss. | Main objective is accountability and stewardship of public funds, not profit. |
| Commonly uses the accruals basis. | Traditionally uses the cash basis (increasingly accrual/IPSAS). |
| Governed by company law and accounting standards (for example, IFRS). | Governed by the constitution, financial regulations, appropriation and enabling laws. |
| Owners provide capital and share in profit. | Financed mainly by taxes, levies, grants and loans; no profit is shared. |
| Prepares trading, profit and loss accounts and a balance sheet. | Prepares statements of receipts and payments, and budget-based reports. |
(Any four.)
Detalles de la respuesta
(a)(i) Three books of accounts used in public sector accounting
(Any three. Others: revenue register, deposit register.)
(a)(ii) Four users of public sector accounting information
(Any four.)
(b) Four differences between private sector and public sector accounting
| Private sector accounting | Public sector accounting |
|---|---|
| Main objective is to determine profit or loss. | Main objective is accountability and stewardship of public funds, not profit. |
| Commonly uses the accruals basis. | Traditionally uses the cash basis (increasingly accrual/IPSAS). |
| Governed by company law and accounting standards (for example, IFRS). | Governed by the constitution, financial regulations, appropriation and enabling laws. |
| Owners provide capital and share in profit. | Financed mainly by taxes, levies, grants and loans; no profit is shared. |
| Prepares trading, profit and loss accounts and a balance sheet. | Prepares statements of receipts and payments, and budget-based reports. |
(Any four.)
Pregunta 6 Informe
The following transactions were extracted from the books of Odis Enterprises for the year ended 31st December 2018: 0) cash received from trade debtors N100,000
i. cash paid to suppliers N72,000
ii. expenses paid during the year were: rent- N2,500, general expenses N1,800
iv. cash of N5200 was withdrawn by the proprietor for personal use.
v. fixed assets valued at N8,000 on 31st December 2017 were to be depreciated at 10 per annum
Additional information:
| 31st December 2017 | 31st December 2018 | |
| Trade debtors | 11,000 | 13,000 |
| Trade creditors | 4,000 | 6,500 |
| Rent owing | - | 500 |
| Cash | 12,100 | 30,000 |
| Stock | 15,900 | 17,000 |
You are required to prepare:
(a) Statement of Affairs as at 1st January 2018
(b) Cashbook
(c) Trading Profit and Loss Account for the year ended 31st December 2018.
Approach. This is an incomplete-records (single entry) question. We first find opening capital from a Statement of Affairs, reconstruct the cash book, derive credit sales and purchases from the debtors/creditors movements, then prepare the final accounts.
(a) Statement of Affairs as at 1st January 2018 (i.e. the position on 31st December 2017)
| Assets | N |
|---|---|
| Fixed assets | 8,000 |
| Stock | 15,900 |
| Trade debtors | 11,000 |
| Cash | 12,100 |
| Total assets | 47,000 |
| Less: Trade creditors | (4,000) |
| Opening capital | 43,000 |
(b) Cash Book (for the year ended 31st December 2018)
| Receipts | N | Payments | N |
|---|---|---|---|
| Balance b/d | 12,100 | Trade creditors (suppliers) | 72,000 |
| Trade debtors | 100,000 | Rent | 2,500 |
| General expenses | 1,800 | ||
| Drawings | 5,200 | ||
| Balance c/d | 30,600 | ||
| 112,100 | 112,100 |
Note: the closing cash of N30,600 is the balancing figure; it agrees with the closing net assets below, confirming the accounts are consistent.
Working - credit sales and purchases
Sales = cash from debtors + closing debtors - opening debtors \( = 100{,}000 + 13{,}000 - 11{,}000 = 102{,}000 \).
Purchases = cash to creditors + closing creditors - opening creditors \( = 72{,}000 + 6{,}500 - 4{,}000 = 74{,}500 \).
Depreciation on fixed assets \( = 10\% \times 8{,}000 = 800 \).
Rent expense = paid 2,500 + owing 500 = 3,000.
(c) Trading, Profit and Loss Account for the year ended 31st December 2018
| Particulars | N | N |
|---|---|---|
| Sales | 102,000 | |
| Less cost of sales: | ||
| Opening stock | 15,900 | |
| Add Purchases | 74,500 | |
| Goods available | 90,400 | |
| Less Closing stock | (17,000) | (73,400) |
| Gross profit | 28,600 | |
| Less expenses: | ||
| Rent (2,500 + 500 owing) | 3,000 | |
| General expenses | 1,800 | |
| Depreciation | 800 | (5,600) |
| Net profit | 23,000 |
Check: Opening capital 43,000 + net profit 23,000 - drawings 5,200 = 60,800. Closing net assets = fixed assets 7,200 + stock 17,000 + debtors 13,000 + cash 30,600 - creditors 6,500 - rent owing 500 = 60,800. The two agree.
Detalles de la respuesta
Approach. This is an incomplete-records (single entry) question. We first find opening capital from a Statement of Affairs, reconstruct the cash book, derive credit sales and purchases from the debtors/creditors movements, then prepare the final accounts.
(a) Statement of Affairs as at 1st January 2018 (i.e. the position on 31st December 2017)
| Assets | N |
|---|---|
| Fixed assets | 8,000 |
| Stock | 15,900 |
| Trade debtors | 11,000 |
| Cash | 12,100 |
| Total assets | 47,000 |
| Less: Trade creditors | (4,000) |
| Opening capital | 43,000 |
(b) Cash Book (for the year ended 31st December 2018)
| Receipts | N | Payments | N |
|---|---|---|---|
| Balance b/d | 12,100 | Trade creditors (suppliers) | 72,000 |
| Trade debtors | 100,000 | Rent | 2,500 |
| General expenses | 1,800 | ||
| Drawings | 5,200 | ||
| Balance c/d | 30,600 | ||
| 112,100 | 112,100 |
Note: the closing cash of N30,600 is the balancing figure; it agrees with the closing net assets below, confirming the accounts are consistent.
Working - credit sales and purchases
Sales = cash from debtors + closing debtors - opening debtors \( = 100{,}000 + 13{,}000 - 11{,}000 = 102{,}000 \).
Purchases = cash to creditors + closing creditors - opening creditors \( = 72{,}000 + 6{,}500 - 4{,}000 = 74{,}500 \).
Depreciation on fixed assets \( = 10\% \times 8{,}000 = 800 \).
Rent expense = paid 2,500 + owing 500 = 3,000.
(c) Trading, Profit and Loss Account for the year ended 31st December 2018
| Particulars | N | N |
|---|---|---|
| Sales | 102,000 | |
| Less cost of sales: | ||
| Opening stock | 15,900 | |
| Add Purchases | 74,500 | |
| Goods available | 90,400 | |
| Less Closing stock | (17,000) | (73,400) |
| Gross profit | 28,600 | |
| Less expenses: | ||
| Rent (2,500 + 500 owing) | 3,000 | |
| General expenses | 1,800 | |
| Depreciation | 800 | (5,600) |
| Net profit | 23,000 |
Check: Opening capital 43,000 + net profit 23,000 - drawings 5,200 = 60,800. Closing net assets = fixed assets 7,200 + stock 17,000 + debtors 13,000 + cash 30,600 - creditors 6,500 - rent owing 500 = 60,800. The two agree.
Pregunta 7 Informe
The following balances were extracted from the books of Abobakau Local Government for the year ended 31st December 2019.
| Construction of an office block | 3,850,000 |
| Renovation of classroom blocks | 1,065,500 |
| Court fines | 90,000 |
| Building permits | 650,000 |
| Rehabilitation of street lights | 470,500 |
| Wages and salaries | 7,880,450 |
| Medical services | 1,334,650 |
| Provision of pipe borne water | 2,500,000 |
| Interest on investments | 250,000 |
| Lorry park levies | 380,000 |
| Market tolls | 560,000 |
| Property rates | 1,200,000 |
| General administration | 630,700 |
| Motor vehicle procured | 6,653,000 |
| Extension of office building | 950,000 |
| Royalties | 4,500,000 |
| Subvention from Central/Fed govt | 20,000,000 |
| Grants from donor agencies | 2,000,000 |
| Donations to charity homes | 250,000 |
| Entertainment permits | 70,000 |
| Staff training | 550,000 |
| Entertainment expenses | 200,000 |
| Marriage registration fees | 80,000 |
| Allowances to community leaders | 380,000 |
| Birth certificate fees | 160,000 |
| Maintenance of motor vehicles | 650,000 |
You are reg You are required to prepare for the ended 31st December 2019
(a) Statement of Recurrent Expenditure
(b) Statement of Capital Expenditure
(c) Statement of Revenue
Approach. Local government accounts separate recurrent expenditure (day-to-day running costs), capital expenditure (spending that creates or improves long-lived assets/projects) and revenue (income received). Each item below is classified accordingly.
(a) Statement of Recurrent Expenditure for the year ended 31st December 2019
| Item | N |
|---|---|
| Wages and salaries | 7,880,450 |
| Medical services | 1,334,650 |
| General administration | 630,700 |
| Maintenance of motor vehicles | 650,000 |
| Staff training | 550,000 |
| Allowances to community leaders | 380,000 |
| Donations to charity homes | 250,000 |
| Entertainment expenses | 200,000 |
| Total recurrent expenditure | 11,875,800 |
(b) Statement of Capital Expenditure for the year ended 31st December 2019
| Item | N |
|---|---|
| Motor vehicle procured | 6,653,000 |
| Construction of an office block | 3,850,000 |
| Provision of pipe borne water | 2,500,000 |
| Renovation of classroom blocks | 1,065,500 |
| Extension of office building | 950,000 |
| Rehabilitation of street lights | 470,500 |
| Total capital expenditure | 15,489,000 |
(c) Statement of Revenue for the year ended 31st December 2019
| Item | N |
|---|---|
| Subvention from Central/Federal government | 20,000,000 |
| Royalties | 4,500,000 |
| Grants from donor agencies | 2,000,000 |
| Property rates | 1,200,000 |
| Building permits | 650,000 |
| Market tolls | 560,000 |
| Lorry park levies | 380,000 |
| Interest on investments | 250,000 |
| Birth certificate fees | 160,000 |
| Court fines | 90,000 |
| Marriage registration fees | 80,000 |
| Entertainment permits | 70,000 |
| Total revenue | 29,940,000 |
Note. Renovation, rehabilitation and extension are treated as capital because they enhance or restore long-lived assets. Maintenance of motor vehicles is recurrent (routine upkeep), whereas the vehicle itself is capital. Permits, fines, levies, rates, fees, royalties, grants and subventions are all revenue receipts.
Detalles de la respuesta
Approach. Local government accounts separate recurrent expenditure (day-to-day running costs), capital expenditure (spending that creates or improves long-lived assets/projects) and revenue (income received). Each item below is classified accordingly.
(a) Statement of Recurrent Expenditure for the year ended 31st December 2019
| Item | N |
|---|---|
| Wages and salaries | 7,880,450 |
| Medical services | 1,334,650 |
| General administration | 630,700 |
| Maintenance of motor vehicles | 650,000 |
| Staff training | 550,000 |
| Allowances to community leaders | 380,000 |
| Donations to charity homes | 250,000 |
| Entertainment expenses | 200,000 |
| Total recurrent expenditure | 11,875,800 |
(b) Statement of Capital Expenditure for the year ended 31st December 2019
| Item | N |
|---|---|
| Motor vehicle procured | 6,653,000 |
| Construction of an office block | 3,850,000 |
| Provision of pipe borne water | 2,500,000 |
| Renovation of classroom blocks | 1,065,500 |
| Extension of office building | 950,000 |
| Rehabilitation of street lights | 470,500 |
| Total capital expenditure | 15,489,000 |
(c) Statement of Revenue for the year ended 31st December 2019
| Item | N |
|---|---|
| Subvention from Central/Federal government | 20,000,000 |
| Royalties | 4,500,000 |
| Grants from donor agencies | 2,000,000 |
| Property rates | 1,200,000 |
| Building permits | 650,000 |
| Market tolls | 560,000 |
| Lorry park levies | 380,000 |
| Interest on investments | 250,000 |
| Birth certificate fees | 160,000 |
| Court fines | 90,000 |
| Marriage registration fees | 80,000 |
| Entertainment permits | 70,000 |
| Total revenue | 29,940,000 |
Note. Renovation, rehabilitation and extension are treated as capital because they enhance or restore long-lived assets. Maintenance of motor vehicles is recurrent (routine upkeep), whereas the vehicle itself is capital. Permits, fines, levies, rates, fees, royalties, grants and subventions are all revenue receipts.
Pregunta 8 Informe
The books of Omiye Social Club showed the following information for the year ended 31st December 2015
| Balance | 3000 | salaries | 10,600 |
| subscription | 130,000 | maintenance | 13,000 |
| proceeds from concert | 9,000 | stationary | 1200 |
| interest on deposit | 2,400 | postage | 600 |
| income from dance | 7,200 | Dance expense | 4,000 |
| general expenses | 5,400 | ||
| balance c/d | 116,800 | ||
| 151,600 | 151,600 |
Balances as at 1st January 2015 were as follows:
| Accumulated fund | 266,000 |
| Bank deposit | 80,000 |
| Clubhouse | 160,000 |
| Furniture and fittings | 24,000 |
Additional information
i. Outstanding as at 31st December 2015:
- stationery N400
- general expenses 1,200
ii. Salaries of l0,600 paid including 1,000 owed since 2014.
iii. Depreciate clubhouse by 10% and furniture and fittings by 15%
You are required to prepare:
(a) Income and Expenditure Account for the year ended 31st December 2015
(b) Balance Sheet as at that date.
Preliminary note. The figures given form a Receipts and Payments account (opening cash N3,000, total N151,600, closing cash N116,800). We first confirm the opening Accumulated Fund, then prepare the Income and Expenditure account (adjusting for outstanding expenses, the prior-year salary paid, and depreciation) and finally the Balance Sheet.
Check on the opening Accumulated Fund (1st January 2015)
| Assets and (liabilities) | N |
|---|---|
| Clubhouse | 160,000 |
| Furniture and fittings | 24,000 |
| Bank deposit | 80,000 |
| Cash balance | 3,000 |
| Less: salaries owing (from 2014) | (1,000) |
| Accumulated Fund | 266,000 |
This agrees with the accumulated fund of N266,000 given in the question.
(a) Income and Expenditure Account for the year ended 31st December 2015
Salaries paid were N10,600 but N1,000 of this belonged to 2014, so only N9,600 is the 2015 charge. Stationery and general expenses are increased by the amounts still outstanding. Depreciation is charged at 10% on the clubhouse (N16,000) and 15% on furniture and fittings (N3,600).
| Expenditure | N | Income | N |
|---|---|---|---|
| Salaries (10,600 - 1,000) | 9,600 | Subscriptions | 130,000 |
| Maintenance | 13,000 | Proceeds from concert | 9,000 |
| Stationery (1,200 + 400) | 1,600 | Interest on deposit | 2,400 |
| Postage | 600 | Income from dance | 7,200 |
| Dance expense | 4,000 | ||
| General expenses (5,400 + 1,200) | 6,600 | ||
| Depreciation: Clubhouse (10%) | 16,000 | ||
| Depreciation: Furniture and fittings (15%) | 3,600 | ||
| Surplus (excess of income over expenditure) | 93,600 | ||
| Total | 148,600 | Total | 148,600 |
Surplus for the year = N93,600 (total income N148,600 less total expenditure N55,000).
(b) Balance Sheet as at 31st December 2015
| Fixed Assets | Cost N | Depreciation N | Net N |
|---|---|---|---|
| Clubhouse | 160,000 | 16,000 | 144,000 |
| Furniture and fittings | 24,000 | 3,600 | 20,400 |
| Total fixed assets | 164,400 |
| Current Assets | N | N |
|---|---|---|
| Bank deposit | 80,000 | |
| Cash balance | 116,800 | |
| Total current assets | 196,800 | |
| Less current liabilities: | ||
| Stationery owing | 400 | |
| General expenses owing | 1,200 | (1,600) |
| Net current assets (working capital) | 195,200 | |
| Net assets | 359,600 |
| Financed by | N |
|---|---|
| Accumulated Fund b/d | 266,000 |
| Add: surplus for the year | 93,600 |
| Accumulated Fund c/d | 359,600 |
The Balance Sheet balances at N359,600, confirming the accounts. Note that the N1,000 salary owed at the start was settled during the year, so no salary liability remains at 31st December 2015.
Detalles de la respuesta
Preliminary note. The figures given form a Receipts and Payments account (opening cash N3,000, total N151,600, closing cash N116,800). We first confirm the opening Accumulated Fund, then prepare the Income and Expenditure account (adjusting for outstanding expenses, the prior-year salary paid, and depreciation) and finally the Balance Sheet.
Check on the opening Accumulated Fund (1st January 2015)
| Assets and (liabilities) | N |
|---|---|
| Clubhouse | 160,000 |
| Furniture and fittings | 24,000 |
| Bank deposit | 80,000 |
| Cash balance | 3,000 |
| Less: salaries owing (from 2014) | (1,000) |
| Accumulated Fund | 266,000 |
This agrees with the accumulated fund of N266,000 given in the question.
(a) Income and Expenditure Account for the year ended 31st December 2015
Salaries paid were N10,600 but N1,000 of this belonged to 2014, so only N9,600 is the 2015 charge. Stationery and general expenses are increased by the amounts still outstanding. Depreciation is charged at 10% on the clubhouse (N16,000) and 15% on furniture and fittings (N3,600).
| Expenditure | N | Income | N |
|---|---|---|---|
| Salaries (10,600 - 1,000) | 9,600 | Subscriptions | 130,000 |
| Maintenance | 13,000 | Proceeds from concert | 9,000 |
| Stationery (1,200 + 400) | 1,600 | Interest on deposit | 2,400 |
| Postage | 600 | Income from dance | 7,200 |
| Dance expense | 4,000 | ||
| General expenses (5,400 + 1,200) | 6,600 | ||
| Depreciation: Clubhouse (10%) | 16,000 | ||
| Depreciation: Furniture and fittings (15%) | 3,600 | ||
| Surplus (excess of income over expenditure) | 93,600 | ||
| Total | 148,600 | Total | 148,600 |
Surplus for the year = N93,600 (total income N148,600 less total expenditure N55,000).
(b) Balance Sheet as at 31st December 2015
| Fixed Assets | Cost N | Depreciation N | Net N |
|---|---|---|---|
| Clubhouse | 160,000 | 16,000 | 144,000 |
| Furniture and fittings | 24,000 | 3,600 | 20,400 |
| Total fixed assets | 164,400 |
| Current Assets | N | N |
|---|---|---|
| Bank deposit | 80,000 | |
| Cash balance | 116,800 | |
| Total current assets | 196,800 | |
| Less current liabilities: | ||
| Stationery owing | 400 | |
| General expenses owing | 1,200 | (1,600) |
| Net current assets (working capital) | 195,200 | |
| Net assets | 359,600 |
| Financed by | N |
|---|---|
| Accumulated Fund b/d | 266,000 |
| Add: surplus for the year | 93,600 |
| Accumulated Fund c/d | 359,600 |
The Balance Sheet balances at N359,600, confirming the accounts. Note that the N1,000 salary owed at the start was settled during the year, so no salary liability remains at 31st December 2015.
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