Waec Model Questions Vol1 2018 Financial Accounting Question 4

The following ledger balances were extracted from the books of Olamide & Co. as at 31 March 2023: - Sales Revenue: ₦1,200,000 (Credit) - Purchases: ₦650,000 (Debit) - Opening Inventory: ₦200,000 (Debit) - Closing Inventory: ₦180,000 (Debit) - Salaries Expense: ₦120,000 (Debit) - Rent Expense: ₦80,000 (Debit) - Utilities Expense: ₦30,000 (Debit) - Advertising Expense: ₦25,000 (Debit) - Machinery (Cost): ₦500,000 (Debit) - Accumulated Depreciation – Machinery: ₦70,000 (Credit) - Accounts Receivable: ₦150,000 (Debit) - Accounts Payable: ₦130,000 (Credit) - Cash in Hand: ₦90,000 (Debit) - Bank: ₦200,000 (Debit) - Capital (Opening): ₦400,000 (Credit) - Drawings: ₦50,000 (Debit) Using the above information, answer the following: a) Prepare an Income Statement for the quarter ended 31 March 2023. b) Determine the Gross Profit and Net Profit for the period. c) Prepare a Statement of Financial Position (Balance Sheet) as at 31 March 2023. d) Compute the Current Ratio and comment on the liquidity position of the business.