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NATIONAL OPEN UNIVERSITY OF NIGERIA
Plot 91 Cadastral Zone Nnamdi Azikiwe Express Way, Jabi-Abuja
FACULTY OF MANAGEMENT SCIENCES
DEPARTMENT OF FINANCIAL STUDIES
JANUARY 2018 EXAMINATION
Course Code: ACC757 Credit Unit: 2
Course Title: Principles of Accounting
Time Allowed: 2 Hours
Instructions:
1. Attempt question number one (1) and any other two (2).
2. Question number 1 is compulsory and carries 30 marks while the other 2 carry 20 marks
each.
3. Present all your points in coherent and orderly manner.
1. (a) BOTA Nigeria Ltd, a manufacturing company, has the following trial balance as at 31st
December, 2016:
Dr Cr
Opening stock:
- Finished goods 87,800
- Work-in-progress 37,000
- Raw material 52,000
Purchase of raw material 750,000
Carriage inward (raw material) 7,000
Capital 593,600
Office equipment (cost 24,000
N40,000)
Drawings 40,000
Factory direct labour cost 374,000
Property, plant and equipment 460,000
(cost N560,000)
Factory indirect wages 300,000
Lighting 25,000
Factory heating 37,400
Office salaries 98,000
Sales commission 93,000
Discount allowed 9,600
Sales 2,130,000
Insurance premium 8,400
Office general expenses 26,800
Bank charges 4,600
Carriage outward 11,800
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Trade receivables 284,600
Trade payable 250,000
Factory general expenses 72,000
Rent and rates 34,000
Bank 123,600
Cash 13,000
2,973,600 2,973,600
Additional information
1. Closing inventories of raw materials – N50,000, Work-in-process N34,000, and
finished goods- N90,000.
2. Depreciation on office equipment, property, plant, and equipment is 10% on cost of
acquisition.
3. The expenses on rent, insurance, and electricity are to be allocated on the ratio 2:1 for
the factory and office respectively.
You are required to prepare the manufacturing account and income statement for the
company for the year ended 31 December, 2016.
2. Paul ltd and Peter ltd decided to form a joint venture on the 1st January 2016. The following
are the details of the transactions:
Name Particular N
Paul ltd Purchased goods 740,000
Paul ltd Paid wages 80,000
Peter ltd Settled transport 56,000
Peter ltd Electricity bill 96,000
Paul ltd Received cash proceeds 1,460,000
You are required to prepare the joint venture accounts and memorandum of joint venture account
for the joint venture business of Paul ltd and Peter ltd.
3. i. Enumerate five features of partnership business.
ii. Outline five features of joint venture business.
4. i. What is a partnership deed?
ii. Define partnership business.
iii. Outline seven rights of a partner.