5 questions. Try each one, then open the answer to check yourself and read the explanation.
Use the information below to answer questions 5 and 6.
Udoh Trading Company Balance Sheet as at 31st December, 1992 (shown in the figure).
What is the working capital?
Answer: C (₦4 000)
Current assets = stock 4,000 + debtors 6,000 + cash 8,000 = ₦18,000. Current liabilities = creditors 9,000 + accrued wages 5,000 = ₦14,000. Working capital = ₦4,000.
Use the information below to answer questions 5 and 6.
Udoh Trading Company Balance Sheet as at 31st December, 1992 (shown in the figure).
The acid test ratio in the company is
Answer: A (1:1)
Acid test = (current assets − stock) ÷ current liabilities = (6,000 + 8,000) ÷ 14,000 = 1:1.
Use the information below to answer questions 27 and 28.
Departmental Trading Account (Extract) (shown in the figure).
Goods worth N 300 was transferred from department Q to P. Similarly, P's total expenses for the period was ₦200.
What was department Q's gross profit?
Answer: C (₦2 300)
Q's cost of sales = 1,000 + 1,500 − 300 transferred out − 500 closing = ₦1,700. Gross profit = 4,000 − 1,700 = ₦2,300.
Use the information below to answer questions 27 and 28.
Departmental Trading Account (Extract) (shown in the figure).
Goods worth N 300 was transferred from department Q to P. Similarly, P's total expenses for the period was ₦200.
Department P's net profit was
Answer: A (₦2 500)
P's cost of sales = 2,000 + 2,500 + 300 transferred in − 1,500 = ₦3,300. Gross profit = 6,000 − 3,300 = ₦2,700; net profit = 2,700 − 200 = ₦2,500.
Sule and Ahmed are in partnership sharing profits and losses equally. If Khadija is admitted as a new partner to take 1/5th as her share. What is the new profit or loss sharing?
Answer: B (Sule 2/5, Ahmed 2/5 and Khadija 1/5)
Khadija takes 1/5, leaving 4/5 to be shared equally: 2/5 each for Sule and Ahmed.