Net Profit – NBC Institute

FA – Nov 2024 – L1 – Q5a – Inventory Loss and Statement of Profit or Loss

Compute inventory loss due to fire and prepare a statement of profit or loss for a sole trader.

Question

Mawulolo Enterprise is a retail business that prepares its accounts on 31 March each year. The business maintains a standard gross profit margin of 30% on sales.

The following financial information was extracted from its records as at 31 March 2024:

Item	GH¢
Inventory at 1 April 2023	254,000
Operating Expenses	378,000
Finance Cost	58,000
Purchases	1,306,000
Sales	1,900,000
Inventory in good standing at 31 March 2024	192,000

On 31 March 2024, a fire outbreak in the warehouse destroyed some of the inventory records and goods.

The tax charge for the year is estimated at GH¢30,000.

Required:

i)Calculate the amount of inventory lost.

ii) Prepare the Statement of Profit or Loss for the year ended 31 March 2024

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost of Sales, Financial Adjustments, Fire Loss, Gross Profit, Inventory Valuation, Net Profit
Level: Level 1

Topic: Inventory
Series: Nov 2024

FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements

Identifying which element is not affected when the proprietor consumes goods.

Question

The value of goods taken by the proprietor of a firm for his consumption will affect all but ONE of the following:

A. Gross profit
B. Net profit
C. Inventory balance
D. Company’s capital
E. Inventory valuation.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Gross Profit, Inventory Valuation, Net Profit
Level: Level 1

Topic: Elements of Financial Statements
Series: MAY 2012

FA – May 2013 – L1 – SA – Q10 – Financial Statements Preparation

This question tests the calculation of a sole trader’s net profit.

Question

Which of the following is used to derive a sole trader’s net profit for a period?

A. Closing net assets + drawings – capital introduced – opening net assets
B. Closing net assets – drawings + capital introduced – opening net assets
C. Closing net assets – drawings – capital introduced – opening net assets
D. Closing net assets + drawings + capital introduced – opening net assets
E. Closing net assets + drawings + capital introduced + opening net assets

Answer

Find Related Questions by Tags, levels, etc.

Tags: Closing Net Assets, Net Profit, Sole Trader
Level: Level 1

Topic: Financial Statements Preparation
Series: MAY 2013

FA – Nov 2015 – L1 – SA – Q8 – Financial Statements Preparation

This question calculates the revised net profit after correcting an accounting error.

Question

Compute the revised net profit, given a net profit before the adjustment as N550,000.
A. N300,000
B. N400,000
C. N525,000
D. N700,000
E. N800,000

Answer

Find Related Questions by Tags, levels, etc.

Tags: Financial Adjustments, Income Statement, Net Profit
Level: Level 1

Topic: Financial Statements Preparation
Series: NOV 2015

FA – Nov 2014 – L1 – SA – Q4 – Correction of Errors

Adjusting net profit after correcting a depreciation error in a motor vehicle account.

Question

A company’s net profit for the year ended 30 June, 2014 was N6,500,000. It was found that N1,800,000 paid for maintenance of motor vehicles had been debited to the motor vehicle account and depreciated at 25% on cost (full year charge) in line with the company’s policy. What would be the net profit after adjusting for the error?

A. N1,350,000
B. N4,700,000
C. N5,150,000
D. N7,800,000
E. N8,300,000

Answer

Find Related Questions by Tags, levels, etc.

Tags: Depreciation, Error Correction, Financial Statements, Net Profit
Level: Level 1

Topic: Correction of errors
Series: NOV 2014

FA – May 2016 – L1 – SA – Q17 – Accounting Treatment for Bad and Doubtful Debts

Identifying the effect of a reduction in the allowance for doubtful debts.

Question

Which of the following reflects the effect of a reduction in the allowance for doubtful debts?
A. Reduction in net profit
B. Reduction in cash balance
C. Reduction in gross profit
D. Increase in gross profit
E. Increase in net profit

Answer

Find Related Questions by Tags, levels, etc.

Tags: Allowances, Doubtful Debts, Financial Transactions, Net Profit
Level: Level 1

Topic: Bad and Doubtful Debts
Series: MAY 2016

FA – Mar 2024 – L1 – Q4 – Non-current assets and depreciation | Preparation of financial statements of a sole trader

Prepare the Statement of Profit or Loss and Statement of Financial Position for Kontiba Enterprise, including necessary adjustments.

Question

Kontiba Enterprise

Statement of Profit or Loss for the year ended 30 September 2023

The following information is also available:
1) Only 10 months’ salaries are shown in the Trial Balance. An equal amount is paid for
salaries for each month of the year.
2) As at 30 September 2023, GH¢2,560 had been prepaid for insurance, whilst GH¢328 was
owing for general expenses.
3) GH¢3,680 had been charged to general expenses for the owner’s private holiday.
4) As at 30 September 2023, inventory was valued at GH¢18,000.
5) A customer, owing GH¢4,032 has been declared bankrupt. This amount is to be written
off in full.
6) An allowance for receivables is to be maintained at 3% of the receivables balance.
7) As at 30 September 2023, the business’s land was valued at GH¢80,000. Land is not
depreciated.
8) Depreciation is to be provided as follows:
Buildings: 4% per annum using the straight line method.
Equipment: 25% per annum using the straight line method.
Page 7 of 20

Motor vehicles: 40% per annum using the reducing balance method.
9) There were no additions or disposals of non-current assets during the financial year.

Required:
i) Prepare the statement of profit or loss for the year ended 30 September 2023. (10 marks)
ii) Prepare the statement of financial position as at 30 September 2023. (10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Adjustments, Balance Sheet, Depreciation, Financial Position, Income Statement, Net Profit
Level: Level 1

Topic: Non-current assets and depreciation, Preparation of financial statements of a sole trader
Series: MAR 2024

FA – Nov 2024 – L1 – Q5a – Inventory Loss and Statement of Profit or Loss

Compute inventory loss due to fire and prepare a statement of profit or loss for a sole trader.

Question

Mawulolo Enterprise is a retail business that prepares its accounts on 31 March each year. The business maintains a standard gross profit margin of 30% on sales.

The following financial information was extracted from its records as at 31 March 2024:

Item	GH¢
Inventory at 1 April 2023	254,000
Operating Expenses	378,000
Finance Cost	58,000
Purchases	1,306,000
Sales	1,900,000
Inventory in good standing at 31 March 2024	192,000

On 31 March 2024, a fire outbreak in the warehouse destroyed some of the inventory records and goods.

The tax charge for the year is estimated at GH¢30,000.

Required:

i)Calculate the amount of inventory lost.

ii) Prepare the Statement of Profit or Loss for the year ended 31 March 2024

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost of Sales, Financial Adjustments, Fire Loss, Gross Profit, Inventory Valuation, Net Profit
Level: Level 1

Topic: Inventory
Series: Nov 2024

FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements

Identifying which element is not affected when the proprietor consumes goods.

Question

The value of goods taken by the proprietor of a firm for his consumption will affect all but ONE of the following:

A. Gross profit
B. Net profit
C. Inventory balance
D. Company’s capital
E. Inventory valuation.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Gross Profit, Inventory Valuation, Net Profit
Level: Level 1

Topic: Elements of Financial Statements
Series: MAY 2012

FA – May 2013 – L1 – SA – Q10 – Financial Statements Preparation

This question tests the calculation of a sole trader’s net profit.

Question

Which of the following is used to derive a sole trader’s net profit for a period?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Closing Net Assets, Net Profit, Sole Trader
Level: Level 1

Topic: Financial Statements Preparation
Series: MAY 2013

FA – Nov 2015 – L1 – SA – Q8 – Financial Statements Preparation

This question calculates the revised net profit after correcting an accounting error.

Question

Compute the revised net profit, given a net profit before the adjustment as N550,000.
A. N300,000
B. N400,000
C. N525,000
D. N700,000
E. N800,000

Answer

Find Related Questions by Tags, levels, etc.

Tags: Financial Adjustments, Income Statement, Net Profit
Level: Level 1

Topic: Financial Statements Preparation
Series: NOV 2015

FA – Nov 2014 – L1 – SA – Q4 – Correction of Errors

Adjusting net profit after correcting a depreciation error in a motor vehicle account.

Question

A. N1,350,000
B. N4,700,000
C. N5,150,000
D. N7,800,000
E. N8,300,000

Answer

Find Related Questions by Tags, levels, etc.

Tags: Depreciation, Error Correction, Financial Statements, Net Profit
Level: Level 1

Topic: Correction of errors
Series: NOV 2014

FA – May 2016 – L1 – SA – Q17 – Accounting Treatment for Bad and Doubtful Debts

Identifying the effect of a reduction in the allowance for doubtful debts.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Allowances, Doubtful Debts, Financial Transactions, Net Profit
Level: Level 1

Topic: Bad and Doubtful Debts
Series: MAY 2016

FA – Mar 2024 – L1 – Q4 – Non-current assets and depreciation | Preparation of financial statements of a sole trader

Prepare the Statement of Profit or Loss and Statement of Financial Position for Kontiba Enterprise, including necessary adjustments.

Question

Kontiba Enterprise

Statement of Profit or Loss for the year ended 30 September 2023

Motor vehicles: 40% per annum using the reducing balance method.
9) There were no additions or disposals of non-current assets during the financial year.

Required:
i) Prepare the statement of profit or loss for the year ended 30 September 2023. (10 marks)
ii) Prepare the statement of financial position as at 30 September 2023. (10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Adjustments, Balance Sheet, Depreciation, Financial Position, Income Statement, Net Profit
Level: Level 1

Topic: Non-current assets and depreciation, Preparation of financial statements of a sole trader
Series: MAR 2024

Question Tag: Net Profit

Filter by Professional Bodies

Filter by Subject

Filter by Series

Filter by Topics

Filter by Levels

FA – Nov 2024 – L1 – Q5a – Inventory Loss and Statement of Profit or Loss

Compute inventory loss due to fire and prepare a statement of profit or loss for a sole trader.

Required:

You're reporting an error for "FA – Nov 2024 – L1 – Q5a – Inventory Loss and Statement of Profit or Loss"

FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements

Identifying which element is not affected when the proprietor consumes goods.

You're reporting an error for "FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements"

FA – May 2013 – L1 – SA – Q10 – Financial Statements Preparation

This question tests the calculation of a sole trader’s net profit.

You're reporting an error for "FA – May 2013 – L1 – SA – Q10 – Financial Statements Preparation"

FA – Nov 2015 – L1 – SA – Q8 – Financial Statements Preparation

This question calculates the revised net profit after correcting an accounting error.

You're reporting an error for "FA – Nov 2015 – L1 – SA – Q8 – Financial Statements Preparation"

FA – Nov 2014 – L1 – SA – Q4 – Correction of Errors

Adjusting net profit after correcting a depreciation error in a motor vehicle account.

You're reporting an error for "FA – Nov 2014 – L1 – SA – Q4 – Correction of Errors"

FA – May 2016 – L1 – SA – Q17 – Accounting Treatment for Bad and Doubtful Debts

Identifying the effect of a reduction in the allowance for doubtful debts.

You're reporting an error for "FA – May 2016 – L1 – SA – Q17 – Accounting Treatment for Bad and Doubtful Debts"

FA – Mar 2024 – L1 – Q4 – Non-current assets and depreciation | Preparation of financial statements of a sole trader

Prepare the Statement of Profit or Loss and Statement of Financial Position for Kontiba Enterprise, including necessary adjustments.

You're reporting an error for "FA – Mar 2024 – L1 – Q4 – Non-current assets and depreciation | Preparation of financial statements of a sole trader"

FA – Nov 2024 – L1 – Q5a – Inventory Loss and Statement of Profit or Loss

Compute inventory loss due to fire and prepare a statement of profit or loss for a sole trader.

Required:

You're reporting an error for "FA – Nov 2024 – L1 – Q5a – Inventory Loss and Statement of Profit or Loss"

FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements

Identifying which element is not affected when the proprietor consumes goods.

You're reporting an error for "FA – May 2012 – L1 – SA – Q10 – Elements of Financial Statements"

FA – May 2013 – L1 – SA – Q10 – Financial Statements Preparation

This question tests the calculation of a sole trader’s net profit.

You're reporting an error for "FA – May 2013 – L1 – SA – Q10 – Financial Statements Preparation"

FA – Nov 2015 – L1 – SA – Q8 – Financial Statements Preparation

This question calculates the revised net profit after correcting an accounting error.

You're reporting an error for "FA – Nov 2015 – L1 – SA – Q8 – Financial Statements Preparation"

FA – Nov 2014 – L1 – SA – Q4 – Correction of Errors

Adjusting net profit after correcting a depreciation error in a motor vehicle account.

You're reporting an error for "FA – Nov 2014 – L1 – SA – Q4 – Correction of Errors"

FA – May 2016 – L1 – SA – Q17 – Accounting Treatment for Bad and Doubtful Debts

Identifying the effect of a reduction in the allowance for doubtful debts.

You're reporting an error for "FA – May 2016 – L1 – SA – Q17 – Accounting Treatment for Bad and Doubtful Debts"

FA – Mar 2024 – L1 – Q4 – Non-current assets and depreciation | Preparation of financial statements of a sole trader

Prepare the Statement of Profit or Loss and Statement of Financial Position for Kontiba Enterprise, including necessary adjustments.

You're reporting an error for "FA – Mar 2024 – L1 – Q4 – Non-current assets and depreciation | Preparation of financial statements of a sole trader"

Our offerings

Contact Info

Customer

Get In Touch

NBC Institute

admin