Bece Model Questions Vol1 2020 Business Studies Question 2

Practice practical question 2 from the 2020 Bece Model Questions Vol1 Business Studies examination. This question covers Office Practice, Invoice preparation, Depreciation, Cash book entry, VAT calculation .

Bece Model Questions Vol1 2020 Business Studies Practical
Topics: Office Practice Invoice preparation Depreciation Cash book entry VAT calculation
Question 2 BECE_MODEL_QUESTIONS_VOL1 • 2020 • BUSINESS_STUDIES • practical

A small trading firm purchased a photocopy machine on 1 January 2023 for ₦180,000. The machine is expected to have a useful life of 5 years and a residual value of ₦30,000. On 15 March 2023 the firm sold 150 units of office stationery to a client under the following terms: - Unit price: ₦2,200 - Quantity: 150 units - Trade discount: 5 % on the total price - Value Added Tax (VAT): 7.5 % applied on the net amount after discount - Payment terms: Cash on delivery Prepare the following:

Question Parts

( a )
Draw a correctly formatted sales invoice showing all required details (seller, buyer, description, quantity, unit price, discount, VAT, total payable).
( b )
Calculate the net amount payable by the client after applying the discount and adding VAT.
( c )
Record the transaction in the cash book (show the appropriate debit and credit entries).
( d )
Depreciation of the photocopy machine:
( ) Calculate the annual depreciation expense using the straight‑line method.
( ) Determine the book value of the machine at the end of 2 years.
( ) Briefly discuss how depreciation influences the firm’s profit and cash flow.

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About This Question

This is Bece Model Questions Vol1 2020 Business Studies Question 2. It is one of the practical questions from the 2020 Bece Model Questions Vol1 Business Studies examination.

The question covers Office Practice, Invoice preparation, Depreciation, Cash book entry, VAT calculation .

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