1. Suppose that opening receivables for Bubbles business is N300,000. There have been total receipts from customers of N550,000 of which N150,000 relates to cash sales and N400,000 relates to receipts from receivables. Discounts allowed in the year totaled N30,000 and closing balance of receivables was N370,000. What are total sales for the year?

2. The opening payables of Decks business are N150,000. Total payments made to suppliers during the year were N140,000. Discounts received were N5,000 and closing payables were N130,000. What are total purchases for the year?

3. On 1 January Emmas bank account is overdrawn by N13,670. Payments in the year totaled N85,360 and on 31st December the closing balance is N22,270 (positive). What are total receipts for the year?

4. The following information relates to Ivorys business:

On 1st January

Electricity accrued

N2,500

Rent prepaid

N3,000

Cash paid in the year

Electricity

N10,000

Rent

N20,000

On 31st December

Electricity accrued

N3,000

Rent Prepaid

N4,000

What are the income statement charges for electricity and rent for the year?

5. ABC and Co has provided the following information for his financial activities for 2019. You are required to prepare his income statement.

Balance as at

31/12/18`

31/12/19

Motor Vehicle

100,000

95,000

Fixtures

70,000

63,000

Inventory

34,000

42,000

Accounts Receivables

36,700

43,900

Accounts Payables

45,800

34,400

Cash at Hand

23,550

34,570

Loan

100,000

90,000

1

Other information provided:

i. His gross profit margin is 25%

ii. Expenses paid during the year included: Rent N2,170, Salaries and Wages N4,800 and

fueling N1,900

iii. His drawings for the year was N5,200

iv. A motor vehicle of N8,000 was bought during the year

6.

i. Differentiate between single entry and incomplete record

ii. Explain two (2) reasons for incompleteness of accounting records

iii. Discuss three (3) limitations of incomplete entry

iv. Why would it be necessary to convert mark-up to margin or from margin to mark-up

(illustrate with worked examples)

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