Waec Model Questions Vol1 2024 Financial Accounting Question 2

Micheal Ltd, a sole trader, commenced business on 1 January 2024 with cash capital of ₦150,000. The following transactions occurred during the year: 1. Purchased goods for cash ₦45,000. 2. Sold goods for cash ₦80,000. 3. Sold goods on credit ₦20,000. 4. Paid salaries equal to 15% of gross profit. 5. Paid rent cash ₦12,000. 6. Received cash ₦10,000 from a customer for goods previously sold on credit. 7. Depreciation on equipment (cost ₦24,000) at 10% per annum. 8. Closing inventory on hand valued at ₦5,000. Using the above information, answer the following: (a) Record the appropriate journal entries for each transaction. (b) Post the entries to the ledger accounts and state the closing balance of each ledger account. (c) Prepare a trial balance as at 31 December 2024. (d) Compute the net profit for the year and explain how the closing inventory affected the profit figure.