AC/Refrigerator Paper 2 WASSCE (SC), 2023

Question 5

 

  1. (i)   Who is an entrepreneur?

    (ii)  Define the term balance sheet.

  1. The following list of balances at the end of the year 31st March, 2019 have extracted from the books of Okoro and sons, a business owned by Mr. Okoro.

Item                                                                                  N
Capital                                                                               165,000
Land and building at cost                                                 120,000
Motor vehicle at cost                                                        45,000
Net profit                                                                          40,000
Furniture and fittings at cost                                             10,000
Creditors                                                                           15,000
Stock of goods                                                                  20,000
Cash at bank                                                                     20,000
Drawings                                                                             5,000

Prepare from the above Items a balance sheet in a vertical form

 

Observation

 

These questions are basically on entrepreneurship, it tested candidates ability to recall some financial concept and prepare a Balance Sheet. Few of the candidates who attempted
these questions and the performance was very poor.

 

The expected responses are:

 

Okoro and sons
Balance sheet as at 31st March, 2019

            Fixed assets                                           ₦
Land and building at cost                               120,000
Motor Vehicle                                                   45,000
Furniture and fittings at cost                           10,000
                                                                                              175,000          
Current assets
Stock of goods                                                  20,000
Cash at bank                                                   20,000
                                                                                              40,000
                                                                                              215,000          
Financed by:

Capital                                                             165,000
Net profit                                                          40,000
                                                                         205,000
Less drawings                                                     5,000
                                                                                              200,000        
Current Liability
Creditors                                                                                 15,000
                                                                                               215,000          
                                                                                   

 

(c)

Current asset               = Stock of goods + cash at bank

= ₦ 20,000 + ₦ 20,000
= ₦ 40,000    

                                                 

Current liability          = Creditors

= ₦15,000 

 

Working capital          = Current asset – Current liability

= ₦ 175,000 – ₦ 15,000
= ₦ 160,000 

 

Net liquid asset           = Current liquid asset – Current liability

= ₦ 175,000 – ₦ 15,000

= ₦ 160,000