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JAMB Principles of Accounts 2000 Question 9

Question 9

Final Accounts of a Sole Trader

Yahuza Enterprises Trial Balance (Extracts) as at Dec. 31, 1998.
Capital ₦21,000 (Cr)
Premises ₦90,000
Debtors ₦35,000
Provisions 1/1/98: Depreciation ₦9,000; Bad and doubtful debts ₦1,500
If premises is to be depreciated at 10% on cost and a 5% provision is to be allowed on debtors, the total asset in the balance sheet is

  1. A.₦125,000
  2. B.₦114,500
  3. C.₦105,500
  4. D.₦105,250.
Show the answer and explanation

Answer: D (₦105,250.)

Explanation

Premises: 90,000 − (9,000 + 9,000) = 72,000. Debtors: 35,000 − 5% (1,750) = 33,250. Total = ₦105,250.