NECO Financial Accounting Obj And Essay/Theory Solution Questions and Answer – JUNE/JULY 2018 Expo Runz.
Account OBJ:
1DCEBDACCED
11EBDDAECECB
21AEAADCEDEB
31CEBACDDCAA
41BCECAAEDDB
51EBACAAEBDC
Please Note: You Are To Answer Two(2) Questions In Section A
While Three(3) Questions In Section B
1a)
i)Higher Supplier Costs: One of the simplest factors that can lead to declining margin is higher costs of goods sold. Over time, your suppliers naturally want to increase their own revenue and margins. Their own costs to produce or supply may go up. These factors may lead to them negotiating or simply charging you higher rates on goods.
ii)Lower Prices: Lowering your prices to generate sales can also reduce gross profit margin. While you may get a sale, large price cuts minimize the gross profit you get on it. Over time, maintaining a strong brand image allows you to maintain stable price points, or even increase prices. If you constantly discount, you run the risk that customers get familiar with the price declines and won’t pay top rates.
iii)Intense Competition: New competitors or increased rivalry from competitors also impact your gross profit margin. The more attractive customer offerings become to the market, the more difficult it is to get customers to pay desirable prices for your solutions.
1b)
For company the appropriation account will start with profits before taxes and then subtract corporate taxes and dividends to arrive at retained profits while For a partnership, the primary purpose of the appropriation account is to show how profits are distributed among the partners.
3i)
Preference shares are shares of a company’s stock with dividends that are paid out to shareholders before
common stock dividends are issued.
3ii)
Goodwill in accounting is an intangible asset that arises when a buyer acquires an existing business. Goodwill
represents assets that are not separately identifiable.
3iii)
Three column cash book (also known as triple column cash book) has three money columns on both debit and credit side – one on each side for recording discount, cash and bank amounts.
3iv)
A bank reconciliation statement is a summary of banking and business activity that reconciles an entity’s bank account with its financial records. The statement outlines the deposits, withdrawals, and other activity impacting a bank account for a specific period.
3v)
Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used to
account for declines in value over time. Business depreciate long-term assets for both tax and accounting purposes.
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5)
Locogi Local Government In Kunddi State
Receipts and payment account for the local government as at 31|12|2007
TABULATE
RECEIPTS- state subvention|Fed subvention|Rates|Sunday Income|Licences|Tenement|
N(naira)- 2,000|3,000|1,535|5.263|12.548|25,000|
PAYMENT – wages and salaries|vechicle exp|vechicle purchase|stationary|maintenace of building|hospital drugs|bank charges|UBE scheme|balance|
N(naira)- 20,430|248|5.020|1,520|2,014|4,000|378|6.290|9.446|
Total 49,346
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8i)
in The Book Of both jeremiah,johnson and jacob memorandum joint venture A/C
-TABULATE-
UNDER-RIGHT-TABLE
Jaremaiah
Rent 10000
Light 3000
Sunday exp 5200
15200
Johnson
Transport 6500
Jacob
Labour 5000
Net profit 128300
155000
Share Of Profit
jeramiah 4/10*128300
51320
johnson -3/10*128300
38490
jacob 3/10*128300
Total 128300
UNDER-LEFT-TABLE
Sales
Jacob 15000
100000
115000
johnson
electric iron 40000
155000
Total 128300
In The Book Of Jeremiah
Joint Venture with johnson and jacob
TABULATE
UNDER-RIGHT-TABLE
1|11 rent 10000
12|11 lightdebt 3000
15|11 sunday exp 5200
15200
Bal/b|d 15200
profit 51320
Total 66520
UNDER-LEFT-TABLE
Bal/b|d 15200
15200
bank 66520
Total 66520
8ii)
TABULATE
In the book of Johnson Joint ventures with jeremiah and jacob
8i)
in The Book Of both jeremiah,johnson and jacob memorandum joint venture A/C
-TABULATE-
UNDER-RIGHT-TABLE
Jaremaiah
Rent 10000
Light 3000
Sunday exp 5200
15200
Johnson
Transport 6500
Jacob
Labour 5000
Net profit 128300
155000
Share Of Profit
jeramiah 4/10*128300
51320
johnson -3/10*128300
38490
jacob 3/10*128300
Total 128300
UNDER-LEFT-TABLE
Sales
Jacob 15000
100000
115000
johnson
electric iron 40000
155000
Total 128300
In The Book Of Jeremiah
Joint Venture with johnson and jacob
TABULATE
UNDER-RIGHT-TABLE
1|11 rent 10000
12|11 lightdebt 3000
15|11 sunday exp 5200
15200
Bal/b|d 15200
profit 51320
Total 66520
UNDER-LEFT-TABLE
Bal/b|d 15200
15200
bank 66520
Total 66520
8ii)
In The Book Of Jeremiah
Joint Venture with johnson and jacob
TABULATE
UNDER-RIGHT-TABLE
9|11 transport 6500
bal b/d 33500
40000
profit 38490
Total 38990
UNDER-LEFT-TABLE
3|11 bank 40000
40000
bal b/d 33500
bank 4990
Total 38990
In The book of jacob joint venture with jeremiah and johnson
TABULATE
UNDER-RIGHT-TABLE
7|11 labour 5000
bal b/d 110000
115000
profit 38490
bank 71510
Total 110000
UNDER-LEFT-TABLE
25|11 bank 15000
30|11 bank (sales) 100000
115000
bad b/d 110000
Total 110000
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9)
trading profit x Loss A/C for the year ended
TABULATE
-UNDER-RIGHT-TABLE
Opening stock 6812
+purchase 72734
carriage 236/72970
-Returns 1022
Total 71 loss account
TABULATE
Insurance 1682
disc allowed 684
salesman 2444
wages 2982
transport 260
gen exp 3012
office sal 5000
tenement 424
Advert 2824
provision 348
Dep:
FIF(Furniture and fittings) 200
M/V(Motor Vechicle) 900
Net Profit 2568
Total 23346
-UNDER-LEFT-TABLE
gross profit 21254
deposite 1074
disc Rec 1018
Total 23346
Balance Sheet As As
TABULATE
-UNDER-RIGHT-TABLE
Capital 44000
+Net profit 2568
Total 46568
-Drawing 3000/43568
Current bad b/d
Creditors 11600
Insurance 260
Total 55428
-UNDER-LEFT-TABLE
fixedd asset
M/V(Motor Vechicle) 6000,900,5100
FIF(Furniture and fittings) 2000,200,1800
freehold 16500/23400
Current Asset
Stock 8636
debitor loos
-prov 510/ 10046
salary 220
bank 3600
cash 9526/32028
Total 55428