Given the following trial‑balance items for the year ended 31 December:

Sales $560{,}000$ Purchases $340{,}000$ Opening stock $45{,}000$ Closing stock $55{,}000$ Salaries $48{,}000$ Rent $24{,}000$ Depreciation - machinery (recorded) $12{,}000$ Machinery cost $120{,}000$ Accumulated depreciation $30{,}000$ Interest on loan $6{,}000$ Loan payable $80{,}000$ Capital (opening) $150{,}000$ Drawings $20{,}000$

Additional information:
- 5 % of the loan is due within one year (current portion).
- Furniture costing $40{,}000$ ₦ is depreciated at 10 % per annum and no depreciation has been recorded yet.
- No provision for doubtful debts is shown; estimated uncollectible debts are 2 % of credit sales (credit sales are 90 % of total sales).

Prepare the statement of profit or loss to determine the net profit for the year, and compute the closing capital of the proprietor.

Question

Given the following trial‑balance items for the year ended 31 December:

Sales $560{,}000$ Purchases $340{,}000$ Opening stock $45{,}000$ Closing stock $55{,}000$ Salaries $48{,}000$ Rent $24{,}000$ Depreciation - machinery (recorded) $12{,}000$ Machinery cost $120{,}000$ Accumulated depreciation $30{,}000$ Interest on loan $6{,}000$ Loan payable $80{,}000$ Capital (opening) $150{,}000$ Drawings $20{,}000$

Additional information:
- 5 % of the loan is due within one year (current portion).
- Furniture costing $40{,}000$ ₦ is depreciated at 10 % per annum and no depreciation has been recorded yet.
- No provision for doubtful debts is shown; estimated uncollectible debts are 2 % of credit sales (credit sales are 90 % of total sales).

Prepare the statement of profit or loss to determine the net profit for the year, and compute the closing capital of the proprietor.

Accepted Answer

Net profit $125{,}920$ ₦; Closing capital $255{,}920$ ₦

Neco 2023 Financial Accounting Question 43

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