Waec Model Questions Vol1 2022 Financial Accounting Question 50

The trial balance of DEF Ltd. as at 31 December 2022 (amounts in ₦ thousands) is shown below: Cash......................120 Accounts Receivable........80 Prepaid Insurance..........12 Supplies...................15 Equipment (cost)...........200 Accumulated Depreciation - Equipment........40 Accounts Payable...........50 Salaries Payable...........10 Share Capital..............150 Retained Earnings (b/f)....60 Sales Revenue..............300 Cost of Goods Sold.........180 Rent Expense...............24 Insurance Expense..........6 Salaries Expense...........30 Interest Expense...........5 Additional information: 1. Equipment is depreciated at 10% per annum on cost (straight‑line, no residual value). No depreciation has been recorded for the year. 2. At year‑end, physical count shows supplies on hand of ₦5,000. 3. The prepaid insurance of ₦12,000 relates to a 12‑month policy purchased on 1 October 2022. 4. Salaries of ₦8,000 are accrued but not yet recorded. 5. Bad debts are estimated at 5% of Accounts Receivable (after the accrued salaries adjustment). No allowance for doubtful accounts exists at the start of the year. 6. The interest expense of ₦5,000 has already been accrued. Prepare the necessary adjusting entries, compute the net profit for the year and state the amount of Retained Earnings at 31 December 2022 (i.e., opening retained earnings plus net profit). Give the final retained earnings figure (in ₦ thousands).