Gce Model Questions Vol1 2023 Financial Accounting Question 14

At year‑end the trial balance of XYZ Ltd shows the following figures (in \(\)₦): Fixed‑asset cost \(150,000\), accumulated depreciation \(45,000\), inventory \(30,000\), debtors \(25,000\), cash \(5,000\); credit‑side items: creditors \(20,000\), loan \(40,000\), provisions \(5,000\), capital \(80,000\), retained earnings \(20,000\). The following adjustments are required: (i) fixed assets are revalued upward by \(20,000\); (ii) depreciation on the revaluation surplus is charged at 10% per annum; (iii) goodwill of \(15,000\) is to be amortised straight‑line over 5 years; (iv) a deferred tax liability of \(8,000\) arises on the revaluation surplus. The profit for the year before these adjustments is \(25,000\). Compute the revised retained earnings at year‑end after incorporating all adjustments.