Neco 2019 Financial Accounting Question 41

Company XYZ has opening machinery cost of \(\text{₦}500,000\) with accumulated depreciation of \(\text{₦}150,000\). During the year it purchased new machinery for \(\text{₦}120,000\). At year‑end the total machinery was revalued to \(\text{₦}700,000\). Depreciation for the year is charged at \(10\%\) of cost on the opening machinery and \(20\%\) of cost on the new machinery. Trading profit for the year is \(\text{₦}250,000\), administrative expenses \(\text{₦}80,000\) and interest expense \(\text{₦}20,000\). The tax rate is \(30\%\) on profit before tax. Opening retained earnings are \(\text{₦}100,000\) and no dividends are paid. Determine the profit after tax and the closing retained earnings.