Question Tag: Current Accounts

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 15 Marks

FA – May 2013 – L1 – SB – Q6 – Accounting Concepts

This question involves preparing the current accounts, cash-in-transit and inventories-in-transit accounts, and an aggregate Statement of Financial Position for October Enterprises Limited.

October Enterprises Limited has its Head office in Lokoja with branches in Ibiam and Imala. The following are the separate Statements of Financial Position of the Head Office (HO) and branches as at 31 December 2012:

Additional Information:

i. Ibiam’s current account balance with HO was arrived at after debiting ₦2,750 cash remitted to Ibiam on 31 December, which was received on 1 January the following year.
ii. Imala’s current account balance with HO was arrived at after debiting ₦8,250 value of inventories returned to Imala on 31 December, which was received in Imala on 1 January the following year.
iii. HO current account balance with Ibiam was arrived at after debiting ₦2,065 inventories returned to HO on 31 December and received in Lokoja on 5 January the following year.
iv. Imala’s current account with Ibiam was arrived at after debiting ₦4,125 inventories sent to Imala on 31 December and received in Imala on 10 January the following year.
v. HO current account with Imala was arrived at after debiting ₦13,750 cash sent to Lokoja on 31 December and received in Lokoja on 12 January the following year.

You are required to prepare:
a. Current accounts (6 Marks)
b. Cash-in-transit account (1 Mark)
c. Inventories-in-transit account (3 Marks)
d. Aggregate Statement of Financial Position as at 31 December 2012, after incorporating the above transactions. (5 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 15 Marks

FA – May 2014 – L1 – SB – Q4 – Partnership Accounts

Admission of a new partner, profit sharing, and preparation of capital and current accounts.

Biggy and Smallie were in partnership, sharing profits and losses in the ratio 2:1. They agreed to admit Fanny into the partnership from 1 January 2012. Fanny is to introduce N140,000, out of which N130,000 is to be his fixed capital. He is to receive a commission of N30,000 per annum in addition to a share of profit. The new profit-sharing ratio is 2:2:1 to Biggy, Smallie, and Fanny, respectively. Other provisions of the Partnership Deed are:

(i) Debit balance in current accounts at the beginning of the year is to attract 5% interest.
(ii) Goodwill is valued at N150,000. No account for goodwill is to be retained in the partnership books.
(iii) Details of the existing partners’ fixed capital and current accounts for the purpose of the agreement are:

Partner Fixed Capital (N) Current Account (N)
Biggy 360,000 100,000
Smallie 240,000 (60,000) DR

(iv) The draft final accounts for the year ended 31 December 2012, before taking into account Fanny’s commission and interest on partners’ current accounts, revealed a profit of N347,000.
(v) The drawings made by the partners are:

Partner Drawings (N)
Biggy 95,000
Smallie 45,000
Fanny 73,900 (including commission)

You are required to prepare:

a. A statement showing the sharing of profit for the year ended 31 December 2012. (5 Marks)
b. The Partners’ capital and current accounts for the year ended 31 December 2012. (10 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

FA – Nov 2022 – L1 – SB – Q2 – Partnership Accounts

This question requires the preparation of a statement of profit or loss and appropriation account and partners’ current accounts.

Bala and Ade had been together in partnership for several years in plastic manufacturing, sharing profits and losses in the ratio of 3:2 after payment of salaries of N3,000,000 p.a. to each partner.

On September 1, 2020, Ngozi was admitted into partnership on the following terms:

  • (a) She paid N2,800,000 to the partnership as her capital contribution; and
  • (b) She would be entitled to a salary of N2,700,000 per annum and a 20% share of profits after charging all salaries.

Bala and Ade are to continue their old profit-sharing ratios, and Ngozi’s 20% share of profits is guaranteed at a minimum of N1,500,000 per annum by the old partners.

On December 31, 2020, the following balances were extracted from the partnership books of Bala, Ade, and Ngozi:

You are informed that:

  • (i) Allowances for doubtful debts should be maintained at 5% of receivables.
  • (ii) Inventory at December 31, 2020, was valued at N12,000,000.
  • (iii) Depreciation on plant and machinery is 20% per annum, and on motor vehicles, it is 25% per annum.

You are required to prepare the following:
a. Statement of profit or loss and appropriation for the year ended December 31, 2020, accounting for Ngozi on a pro-rata time basis. (12 Marks)
b. Partners’ current accounts for the above period. (8 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

FA – Nov 2023 – L1 – SB – Q6 – Partnership Accounts

Perform partnership accounting involving profit sharing, and preparation of capital and current accounts.

ABO Partnership consists of three partners: Awka, Bwari, and Owo. The partnership agreement specifies that profits and losses are to be shared in the following manner:

  • Awka: 40%
  • Bwari: 30%
  • Owo: 30%

The following balances are extracted from the partnership’s statement of financial position as at September 30, 2023:

Account Amount (₦)
Cash 250,000
Account Receivables 400,000
Inventories 200,000
Furniture and Fittings (carrying amount) 250,000
Account Payables 120,000
Loan Notes 300,000

Additional Information:
i. During the year, the partnership earned a profit of ₦600,000. Interest on the loan notes is 10% per annum.

ii. Partners’ current account balances at the beginning of the year were:

  • Awka: ₦150,000 (Credit Balance)
  • Bwari: ₦100,000 (Debit Balance)
  • Owo: ₦50,000 (Credit Balance)

iii. Partners’ salaries are as follows:

  • Awka: ₦120,000
  • Bwari: ₦90,000
  • Owo: ₦90,000

iv. Transfers made during the year from current accounts to capital accounts:

  • Awka: ₦68,000
  • Bwari: ₦26,000
  • Owo: ₦26,000

Assume the initial capital accounts are established according to the agreed profit-sharing ratios.

Required:
a. Show how the profits of ABO Partnership for the year ended September 30, 2023, are shared among the partners.
(6 Marks)

b. Calculate the partners’ initial capital.
(5 Marks)

c. Prepare partners’ current accounts for ABO Partnership as of September 30, 2023.
(6 Marks)

d. Prepare partners’ capital accounts for ABO Partnership as of September 30, 2023.
(3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

FA – May 2023 – L1 – SB – Q4 – Partnership Accounts

Preparation of profit or loss appropriation accounts, partners’ current accounts, and statement of financial position for the partnership of Lag and Kase.

Lag and Kase were in partnership. Their first year of operation ended on December 31, 2018. On January 01, 2018, Lag made a cash contribution of N96,000,000 and a motor car valued at N28,000,000. The car cost N45,000,000 few years ago when it was purchased. Kase contributed N84,000,000 cash. The partnership constitution spelt out the following:

  1. Profit or loss sharing ratio shall be Lag 3, Kase 2.
  2. Interest on capital shall be 8% per annum.
  3. Interest on drawings shall be 6% per annum.
  4. A salary of N16,000,000 per annum shall be paid to Kase, who is an active partner.

During the year ended December 31, 2018, the business made a net profit of N58,000,000 before any appropriation and interest on a 10% N40,000,000 loan advanced by Lag to the business.

Drawings during the year were Lag N15,000,000 and Kase N18,000,000.

Required:

a. Prepare the profit or loss appropriation accounts for the year ended December 31, 2018. (8 Marks)

b. The partners’ current accounts for the year ended December 31, 2018. (5 Marks)

c. The partners’ capital accounts for the year ended December 31, 2018. (4 Marks)

d. The statement of financial position (extract) as at December 31, 2018. (3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 15 Marks

FR – May 2016 – L2 – Q5 – Preparation of Financial Statements

Prepare the statement of profit or loss, statement of financial position, and current accounts for Dum and Sor's partnership.

Dum and Sor were in partnership as retail traders, sharing profits and losses: Dum three quarters (3/4) and Sor one quarter (1/4). The partners were credited annually with interest at the rate of 6% per annum on their fixed capitals, but no interest was charged on their drawings. Sor was responsible for the buying department of the business, while Dum managed the head office. Sor was employed as the branch manager, and both Dum and Sor were each entitled to a commission of 10% of the net profits (after charging such commission) of the shop managed by him. All goods were purchased by the head office, and goods sent to the branch were invoiced at cost.

The following was the trial balance as at 31st December 2014:

Additional Information:

  1. Inventory on 31st December 2014 amounted to:
    • Head office: GH¢14,440
    • Branch: GH¢6,570
  2. Administrative expenses are to be apportioned between head office and the branch in proportion to sales.
  3. Depreciation is to be provided on furniture and fittings at 10% of cost.
  4. The provision for bad and doubtful debts is to be increased by GH¢50 in respect of head office receivables and decreased by GH¢20 in the case of the branch.
  5. On 31st December 2014, cash amounting to GH¢2,400 was in transit from the branch to head office and had been recorded in the branch books but not in those of the head office. Goods invoiced at GH¢800 were in transit from head office to the branch and had been recorded in the head office books but not in the branch books. Necessary adjustments are to be made in the head office books.

Required:
a) Prepare the statement of profit or loss and the appropriation account for the year ended 31st December 2014, showing the net profit of the head office and branch respectively.
b) Prepare the statement of financial position as at 31st December 2014.
c) Prepare the current accounts for head office and the branch.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

FA – July 2023 – L1 – Q2 – Preparation of Partnership accounts

Prepare a ledger account for rental income and a partnership's profit and loss appropriation account with related partners' current accounts.

a) A company owns a number of properties which are rented to tenants. The following information is available for the year ended 30 June 2021:

Date Rent in advance (GHȼ) Rent in arrears (GHȼ)
30 June 2020 140,500 5,200
30 June 2021 148,200 9,200

Cash received from tenants for the year ended 30 June 2021 was GHȼ820,400. All rent in arrears was subsequently received.

Required:

Prepare the ledger account for rental income showing the transfer to the Statement of Profit and Loss, for the year ended 30 June 2021. (5 marks)

b) Awuni, Adjetey, and Kwame are in partnership, running an evening school, and sharing residual profits and losses in the ratio 4:3:3 respectively. At 1 October 2021 their capital and current account balances were:

By formal agreement, the partners are entitled to receive interest at 5% on capital. In addition, Adjetey is paid an annual salary of GHȼ5,455 for his part in running the business.

On 1 April 2022, by mutual agreement, Kwame increased his capital by paying a further GHȼ4,000 into the partnership bank account. Awuni reduced his capital by GHȼ5,000, but kept this in the partnership as a loan bearing interest at 10% per annum. Interest on the loans, by agreement, is credited to Awuni’s current account.

The partners are allowed to take out drawings at any time during the year, but they have agreed to charge interest on such drawings. The date of taking out the drawings, the amount drawn out by each partner, and the interest payable, were as follows during the year to 30 September 2022:

Required:

i) Prepare the profit and loss appropriation account for the year ended 30 September 2022. (8 marks)
ii) Prepare the partners’ current accounts for the year ended 30 September 2022. (7 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 15 Marks

FA – May 2013 – L1 – SB – Q6 – Accounting Concepts

This question involves preparing the current accounts, cash-in-transit and inventories-in-transit accounts, and an aggregate Statement of Financial Position for October Enterprises Limited.

October Enterprises Limited has its Head office in Lokoja with branches in Ibiam and Imala. The following are the separate Statements of Financial Position of the Head Office (HO) and branches as at 31 December 2012:

Additional Information:

i. Ibiam’s current account balance with HO was arrived at after debiting ₦2,750 cash remitted to Ibiam on 31 December, which was received on 1 January the following year.
ii. Imala’s current account balance with HO was arrived at after debiting ₦8,250 value of inventories returned to Imala on 31 December, which was received in Imala on 1 January the following year.
iii. HO current account balance with Ibiam was arrived at after debiting ₦2,065 inventories returned to HO on 31 December and received in Lokoja on 5 January the following year.
iv. Imala’s current account with Ibiam was arrived at after debiting ₦4,125 inventories sent to Imala on 31 December and received in Imala on 10 January the following year.
v. HO current account with Imala was arrived at after debiting ₦13,750 cash sent to Lokoja on 31 December and received in Lokoja on 12 January the following year.

You are required to prepare:
a. Current accounts (6 Marks)
b. Cash-in-transit account (1 Mark)
c. Inventories-in-transit account (3 Marks)
d. Aggregate Statement of Financial Position as at 31 December 2012, after incorporating the above transactions. (5 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 15 Marks

FA – May 2014 – L1 – SB – Q4 – Partnership Accounts

Admission of a new partner, profit sharing, and preparation of capital and current accounts.

Biggy and Smallie were in partnership, sharing profits and losses in the ratio 2:1. They agreed to admit Fanny into the partnership from 1 January 2012. Fanny is to introduce N140,000, out of which N130,000 is to be his fixed capital. He is to receive a commission of N30,000 per annum in addition to a share of profit. The new profit-sharing ratio is 2:2:1 to Biggy, Smallie, and Fanny, respectively. Other provisions of the Partnership Deed are:

(i) Debit balance in current accounts at the beginning of the year is to attract 5% interest.
(ii) Goodwill is valued at N150,000. No account for goodwill is to be retained in the partnership books.
(iii) Details of the existing partners’ fixed capital and current accounts for the purpose of the agreement are:

Partner Fixed Capital (N) Current Account (N)
Biggy 360,000 100,000
Smallie 240,000 (60,000) DR

(iv) The draft final accounts for the year ended 31 December 2012, before taking into account Fanny’s commission and interest on partners’ current accounts, revealed a profit of N347,000.
(v) The drawings made by the partners are:

Partner Drawings (N)
Biggy 95,000
Smallie 45,000
Fanny 73,900 (including commission)

You are required to prepare:

a. A statement showing the sharing of profit for the year ended 31 December 2012. (5 Marks)
b. The Partners’ capital and current accounts for the year ended 31 December 2012. (10 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

FA – Nov 2022 – L1 – SB – Q2 – Partnership Accounts

This question requires the preparation of a statement of profit or loss and appropriation account and partners’ current accounts.

Bala and Ade had been together in partnership for several years in plastic manufacturing, sharing profits and losses in the ratio of 3:2 after payment of salaries of N3,000,000 p.a. to each partner.

On September 1, 2020, Ngozi was admitted into partnership on the following terms:

  • (a) She paid N2,800,000 to the partnership as her capital contribution; and
  • (b) She would be entitled to a salary of N2,700,000 per annum and a 20% share of profits after charging all salaries.

Bala and Ade are to continue their old profit-sharing ratios, and Ngozi’s 20% share of profits is guaranteed at a minimum of N1,500,000 per annum by the old partners.

On December 31, 2020, the following balances were extracted from the partnership books of Bala, Ade, and Ngozi:

You are informed that:

  • (i) Allowances for doubtful debts should be maintained at 5% of receivables.
  • (ii) Inventory at December 31, 2020, was valued at N12,000,000.
  • (iii) Depreciation on plant and machinery is 20% per annum, and on motor vehicles, it is 25% per annum.

You are required to prepare the following:
a. Statement of profit or loss and appropriation for the year ended December 31, 2020, accounting for Ngozi on a pro-rata time basis. (12 Marks)
b. Partners’ current accounts for the above period. (8 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

FA – Nov 2023 – L1 – SB – Q6 – Partnership Accounts

Perform partnership accounting involving profit sharing, and preparation of capital and current accounts.

ABO Partnership consists of three partners: Awka, Bwari, and Owo. The partnership agreement specifies that profits and losses are to be shared in the following manner:

  • Awka: 40%
  • Bwari: 30%
  • Owo: 30%

The following balances are extracted from the partnership’s statement of financial position as at September 30, 2023:

Account Amount (₦)
Cash 250,000
Account Receivables 400,000
Inventories 200,000
Furniture and Fittings (carrying amount) 250,000
Account Payables 120,000
Loan Notes 300,000

Additional Information:
i. During the year, the partnership earned a profit of ₦600,000. Interest on the loan notes is 10% per annum.

ii. Partners’ current account balances at the beginning of the year were:

  • Awka: ₦150,000 (Credit Balance)
  • Bwari: ₦100,000 (Debit Balance)
  • Owo: ₦50,000 (Credit Balance)

iii. Partners’ salaries are as follows:

  • Awka: ₦120,000
  • Bwari: ₦90,000
  • Owo: ₦90,000

iv. Transfers made during the year from current accounts to capital accounts:

  • Awka: ₦68,000
  • Bwari: ₦26,000
  • Owo: ₦26,000

Assume the initial capital accounts are established according to the agreed profit-sharing ratios.

Required:
a. Show how the profits of ABO Partnership for the year ended September 30, 2023, are shared among the partners.
(6 Marks)

b. Calculate the partners’ initial capital.
(5 Marks)

c. Prepare partners’ current accounts for ABO Partnership as of September 30, 2023.
(6 Marks)

d. Prepare partners’ capital accounts for ABO Partnership as of September 30, 2023.
(3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

FA – May 2023 – L1 – SB – Q4 – Partnership Accounts

Preparation of profit or loss appropriation accounts, partners’ current accounts, and statement of financial position for the partnership of Lag and Kase.

Lag and Kase were in partnership. Their first year of operation ended on December 31, 2018. On January 01, 2018, Lag made a cash contribution of N96,000,000 and a motor car valued at N28,000,000. The car cost N45,000,000 few years ago when it was purchased. Kase contributed N84,000,000 cash. The partnership constitution spelt out the following:

  1. Profit or loss sharing ratio shall be Lag 3, Kase 2.
  2. Interest on capital shall be 8% per annum.
  3. Interest on drawings shall be 6% per annum.
  4. A salary of N16,000,000 per annum shall be paid to Kase, who is an active partner.

During the year ended December 31, 2018, the business made a net profit of N58,000,000 before any appropriation and interest on a 10% N40,000,000 loan advanced by Lag to the business.

Drawings during the year were Lag N15,000,000 and Kase N18,000,000.

Required:

a. Prepare the profit or loss appropriation accounts for the year ended December 31, 2018. (8 Marks)

b. The partners’ current accounts for the year ended December 31, 2018. (5 Marks)

c. The partners’ capital accounts for the year ended December 31, 2018. (4 Marks)

d. The statement of financial position (extract) as at December 31, 2018. (3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 15 Marks

FR – May 2016 – L2 – Q5 – Preparation of Financial Statements

Prepare the statement of profit or loss, statement of financial position, and current accounts for Dum and Sor's partnership.

Dum and Sor were in partnership as retail traders, sharing profits and losses: Dum three quarters (3/4) and Sor one quarter (1/4). The partners were credited annually with interest at the rate of 6% per annum on their fixed capitals, but no interest was charged on their drawings. Sor was responsible for the buying department of the business, while Dum managed the head office. Sor was employed as the branch manager, and both Dum and Sor were each entitled to a commission of 10% of the net profits (after charging such commission) of the shop managed by him. All goods were purchased by the head office, and goods sent to the branch were invoiced at cost.

The following was the trial balance as at 31st December 2014:

Additional Information:

  1. Inventory on 31st December 2014 amounted to:
    • Head office: GH¢14,440
    • Branch: GH¢6,570
  2. Administrative expenses are to be apportioned between head office and the branch in proportion to sales.
  3. Depreciation is to be provided on furniture and fittings at 10% of cost.
  4. The provision for bad and doubtful debts is to be increased by GH¢50 in respect of head office receivables and decreased by GH¢20 in the case of the branch.
  5. On 31st December 2014, cash amounting to GH¢2,400 was in transit from the branch to head office and had been recorded in the branch books but not in those of the head office. Goods invoiced at GH¢800 were in transit from head office to the branch and had been recorded in the head office books but not in the branch books. Necessary adjustments are to be made in the head office books.

Required:
a) Prepare the statement of profit or loss and the appropriation account for the year ended 31st December 2014, showing the net profit of the head office and branch respectively.
b) Prepare the statement of financial position as at 31st December 2014.
c) Prepare the current accounts for head office and the branch.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
  • 20 Marks

FA – July 2023 – L1 – Q2 – Preparation of Partnership accounts

Prepare a ledger account for rental income and a partnership's profit and loss appropriation account with related partners' current accounts.

a) A company owns a number of properties which are rented to tenants. The following information is available for the year ended 30 June 2021:

Date Rent in advance (GHȼ) Rent in arrears (GHȼ)
30 June 2020 140,500 5,200
30 June 2021 148,200 9,200

Cash received from tenants for the year ended 30 June 2021 was GHȼ820,400. All rent in arrears was subsequently received.

Required:

Prepare the ledger account for rental income showing the transfer to the Statement of Profit and Loss, for the year ended 30 June 2021. (5 marks)

b) Awuni, Adjetey, and Kwame are in partnership, running an evening school, and sharing residual profits and losses in the ratio 4:3:3 respectively. At 1 October 2021 their capital and current account balances were:

By formal agreement, the partners are entitled to receive interest at 5% on capital. In addition, Adjetey is paid an annual salary of GHȼ5,455 for his part in running the business.

On 1 April 2022, by mutual agreement, Kwame increased his capital by paying a further GHȼ4,000 into the partnership bank account. Awuni reduced his capital by GHȼ5,000, but kept this in the partnership as a loan bearing interest at 10% per annum. Interest on the loans, by agreement, is credited to Awuni’s current account.

The partners are allowed to take out drawings at any time during the year, but they have agreed to charge interest on such drawings. The date of taking out the drawings, the amount drawn out by each partner, and the interest payable, were as follows during the year to 30 September 2022:

Required:

i) Prepare the profit and loss appropriation account for the year ended 30 September 2022. (8 marks)
ii) Prepare the partners’ current accounts for the year ended 30 September 2022. (7 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Contact Info

  • +233203701923
    +233543919232
  • info@nbcinstitute.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope

NBC Institute

Hello! How can I help you today?