passwella.
Menu

JAMB Principles of Accounts 1994 Question 25

Question 25

Incomplete Records

Chukwuma Okeke did not keep his books based on the double entry principle.
On 1st January, 1993, Cash in hand was ₦60, Bank overdraft ₦1 100, Debtor ₦7 240, Stock ₦27 450, Furnishings ₦2 000 and Creditors ₦5 850.
As at 31st December 1993, Cash in hand was ₦40, Cash at bank ₦1 050, Debtors ₦6 720, Stock ₦29 180, Furnishings ₦2 000 and Creditors ₦6 990
Determine his net profit as at 31st December, 1993.

  1. A.₦2 000
  2. B.₦2 200
  3. C.₦3 500
  4. D.₦4 200.
Show the answer and explanation

Answer: B (₦2 200)

Explanation

Closing assets = 40 + 1 050 + 6 720 + 29 180 + 2 000 = ₦38 990; less creditors ₦6 990 gives closing capital ₦32 000. Profit = 32 000 − 29 800 = ₦2 200.