Question

5. Oluchi is a trader who does not keep a complete set of accounting records but is able to provide information about her business (Debtors, Creditors, Bank, Fittings, Stock, Expenses accrued and Rent prepaid as at 1st January 2019 and 31st December 2019, plus a summarised Bank Account for the year, cash sales deposited after paying expenses of N66,000 and drawings of N30,000). You are required to prepare: (a) Total Debtors Account; (b) Sales Account; (c) Total Creditors Account; (d) Trading, Profit and Loss Account for the year ended 31st December 2019.

Accepted Answer

(a) Total Debtors Account: Bal b/d N190,000 + Credit sales N276,000 = N466,000, balanced by Bank (receipts from debtors) N236,000 and Bal c/d N230,000.
(b) Sales Account: Credit Sales N276,000 + Cash Sales N198,000 = Total Sales N474,000, transferred to Trading Account.
(c) Total Creditors Account: Bal b/d N120,000 + Credit purchases N290,000 = N410,000, balanced by Bank (payments to creditors) N320,000 and Bal c/d N90,000.
(d) Trading, Profit and Loss Account for year ended 31 December 2019: Opening stock N124,000 + Purchases N290,000 = Cost of goods available for sale N414,000, less Closing stock N140,000 = Cost of goods sold N274,000. Sales N474,000 less Cost of goods sold N274,000 = Gross profit N200,000. From gross profit, deduct depreciation on furniture and fittings (N150,000-N135,000) N15,000 and expenses (N58,000+N18,000) N54,000, and rent (N200,000+N8,000-N100,000) N108,000 to arrive at Net profit of N23,000.

WAEC Accounting 2021 Theory — Question 5

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