WAEC 2018 Financial Accounting Obj And Essay Answer – May/June Expo

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_WAEC 2018 FINANCIAL ACCOUNT OBJ_

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1a)

i)It can result in a business exhausting the budget, leading to spending more than

what is coming in.

ii)Businesses may need to file for bankruptcy or shut their doors if they fail to keep adequate records from the beginning.

iii)It can result in problems with suppliers, payroll, utilities, and other vital components to a running successful business.

1b)

- Relevance means an account information to make a difference in decision making

- Comparability means an account information can be used to compare different entities

- Consistency: information is consistently presented from year to year 

- Reliability means an account  information is verifiable, factual, and neutral

1b)

- Relevance means an account information to make a difference in decision making

- Comparability means an account information can be used to compare different entities

- Consistency: information is consistently presented from year to year 

- Reliability means an account  information is verifiable, factual, and neutral

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2ai)

Direct materials consist of all of the materials that become an integral part of the finished product. Direct materials should include the actual cost of the materials, as well as freight in, import duties, purchasing costs, receiving costs, storage costs and other directly attributable costs of acquiring the materials.

Example- Orange in fanta making

2aii)

Direct labor consists of all of the personnel costs required to manufacture the finished product. Direct labor should include wages, payroll taxes, and benefits associated with personnel who are integral to manufacturing the finished product.

Example- Wage of machine operator

2aiii)

Factory overhead consists of all of the other costs required to manufacture the finished product that do not fit into the direct material or direct labor elements. They consist mainly of indirect material, indirect labor, depreciation, utilities, rent, repairs and maintenance and insurance.

Example- Indirect wages.

2b)

i)RAW MATERIALS

These are the materials or goods purchased by the manufacturer. Manufacturing process is applied on the raw material to produce desired finished goods. 

ii)WORK-IN-PROGRESS (WIP) These are the partly processed raw materials lying on the

production floor. 

iii)FINISHED GOODS

These are the final products after manufacturing process

on raw materials. They are sold in the market.There are two kinds of manufacturing industries.

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*3A*

Where a big business with diverse trading activities is conducted under the same roof the same is usually divided into several departments and each department deals with a particular kind of goods or service. For example, a textile merchant may trade in cotton, woolen and jute fabrics. The overall performance for this type of business depends, however, on departmental efficiency.

*3B*

(i) Compare the results among the different departments together with the previous results thereof,

(ii) Formulate policy in order to extend or to develop the enterprise in the proper line; and

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6a)

Tabulate

Cash book Adjustment

Bal bld N48,500

interest on investment N2500

credit transfer N3000

54,000

Left Table

Bank Charges N1000

Dishonured cheques N2000

bal cld N51,000

54,000

Total Bal bld N51,000

6b)

Tabulate

Bank Reconcilation statement at 31/12/2016

balance as per adjusted cash book N N51,000

add unpresented cheques 8850

add back wrong credit 3500

12,350/63,350

less uncredited cheques (8450)

balance as per bank statement N54,900

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7 a )

Statement Of affairs as at 1 | 1 | 06

Tabulate

Right Table

Capital ( Opening ) N 30,000

Creditors N 1 ,000

Insurance N 2 ,000

N 33,000

Left Table

Land And Building N 15,000

Motor Vechicle N 6 ,000

Stock N 4 ,000

Cash N 6 ,000

Debtors N 2 ,000

N 33,000

7 b )

Trading Profit and loss account for the year ended 31st december 2016

Tabulate

Right Table

opening stock N 4000

purchases N 11,500

15,500

Closing Stock ( 2 ,000 )

Cost of goods sold 13500

gross profit cld 17500

31,000

salaries N 5000

rent and rates N 4000

insurance N 5000

dep on motor vechicle N 2000

net profit N 1500

17500

Left Table

Sales N 31,000

31,000

gross profit b | d N 17,500

N 17,500

7 c )

Balance Sheet as at 31| 12| 2006

Tabulate

Right Tabule

Capital N 30,000

add net profit N 1500

N 31,500

current liability

creditor N 500

insurance Owning N 6000

N 38,000

Table Left

Fixed Assests

Land and Building N 15,000

motor vehicle N 4000

19,000

current assets

stock N 2000

debtors N 3000

Cash N 14,000

N 38,000

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9)

Obihan trading profit and loss account

SALES = 1,200,000

Less return inward = 

15,000

= 1,185,000

Less cost of sales

Opening stock = 3000,000

Add purchase 1,050,000

Less return outward = 18,600

Net purchase=1,031,400

Cost of goods available. =1,331,400

Less closing stock=360,000

Cost of goods sold=971,400

GROSS PROFIT=213600

LESS OPERATIVE EXPENSIVE

Rates (18,000 +1,500) = 16,500

Rates ( 18,000 + 660) = 3,660

Salaries (90,000 + 15,000) = 105,000

Bad Debits = 600

Insurance = 93,000

Depreciation: Furniture 9,000

Machineries = 18,000

Provision for bad debit = 540

NET LOSS 246,300

32,700

ANSWER LOADING.............


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