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JAMB Accounts Principles of Accounts 2010 Paper

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Question : 21

Total: 48

Use the information below to answer questions

........................31/12/08...........31/12/09

Furniture and fittings..N21 000,............N28 000

Office equipment........N9 800,.............N13 200

Debtors.................N6 800,.............N5 200

Creditors...............N4 900,.............N5 100

Cash at bank............N7 000,.............N4 600

Accrued electricity bills...................N1 200

Monthly drawings average N330.

N5 000
N3 960
N1 040
N8 960

Solution:

Concept:

Profit = increase in net assets + drawings − capital introduced.

Explanation:

Annual drawings =

330 \times 12 = \mathrm{N}3,960

.

Opening net assets =

(21,000 + 9,800 + 6,800 + 7,000) - 4,900 = \mathrm{N}39,700

.

Closing net assets =

(28,000 + 13,200 + 5,200 + 4,600) - (5,100 + 1,200) = \mathrm{N}44,700

.

Increase in net assets =

44,700 - 39,700 = \mathrm{N}5,000

.

Profit =

5,000 + 3,960 = \mathrm{N}8,960

.

Answer:

D. N8,960

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