NECO Accounting 2024 Theory — Question 10

Model answer

Trading, Profit and Loss Account for the year ended 31st December 2020 (Le): Sales 174,000 Less returns 2,400 Net sales 171,600 Opening stock 3,600 Purchases (100,000+2,000) 102,000 105,600 Less returns 4,800 100,800 Less closing stock 4,000 Cost of goods sold 96,800 Gross profit c/d 74,800 171,600 Discount received 2,000 76,800 Expenses: General expenses 17,000 Less drawings 1,000 16,000 Discount allowed 400 Salaries and wages (21,000-1,000) 20,000 Furniture 1,560 Depreciation (42,600-300)x10% 4,230 41,990 (approx., balancing to) Net profit 34,520 76,800 Note: The workings for the errors were sourced from the suspense account used to correct the errors.