All practice questions

Question 321Question →

In the industrial Contact Process, sulfur(VI) oxide ( $SO_3$ ) is hydrated to form tetraoxosulfate(VI) acid ( $H_2SO_4$ ). What volume of $SO_3$ gas, measured in $\text{dm}^3$ at s.t.p., is theoretically required to produce $196\text{ g}$ of pure $H_2SO_4$ ? [Molar volume of gas at s.t.p. = $22.4\text{ dm}^3\text{mol}^{-1}$ , $H = 1.0$ , $S = 32.0$ , $O = 16.0$ ]

Show answer & explanation

Answer: 44.8

Answer

44.8 dm³

The molar mass of

H_2SO_4

is

98.0\text{ g mol}^{-1}

, so

196\text{ g}

corresponds to

2.0\text{ moles}

. According to the equation

SO_3 + H_2O \rightarrow H_2SO_4

,

1\text{ mole}

of

SO_3

yields

1\text{ mole}

of

H_2SO_4

. Therefore,

2.0\text{ moles}

of

SO_3

gas is needed, which occupies

2.0 \times 22.4\text{ dm}^3 = 44.8\text{ dm}^3

at s.t.p.

Step-by-Step Solution

1

Calculate the molar mass of tetraoxosulfate(VI) acid (

H_2SO_4

).

\text{Molar mass of } H_2SO_4 = 2(1.0) + 32.0 + 4(16.0) = 98.0\text{ g mol}^{-1}

.

Essential to convert mass of acid to chemical amount in moles.

2

Calculate the number of moles of

H_2SO_4

in

196\text{ g}

.

\text{Moles of } H_2SO_4 = \frac{196\text{ g}}{98.0\text{ g mol}^{-1}} = 2.0\text{ mol}

.

Finds the quantitative molar requirement.

3

Calculate the required volume of

SO_3

gas at s.t.p.

\text{Volume of } SO_3 = 2.0\text{ mol} \times 22.4\text{ dm}^3\text{mol}^{-1} = 44.8\text{ dm}^3

.

Based on the 1:1 mole ratio of

SO_3

to

H_2SO_4

and standard molar gas volume.

Key Concept

Molar gas volume and stoichiometric relationships in the Contact Process

Question 322Question →

In guinea pigs (*Cavia porcellus*), black coat color ( $B$ ) is dominant over white coat color ( $b$ ), and short hair ( $S$ ) is dominant over long hair ( $s$ ). If two heterozygous guinea pigs ( $BbSs$ ) are mated and produce a total of $400$ offspring, how many offspring are expected to display the black coat and long hair phenotype?

Show answer & explanation

Answer: 75

Answer

75 offspring are expected to display the black coat and long hair phenotype.

In a dihybrid cross between two individuals heterozygous for both traits (

BbSs \times BbSs

), independent assortment produces an

F_2

phenotypic ratio of

9:3:3:1

. The phenotype with one dominant and one recessive trait (black coat and long hair,

B\_ss

) represents

\frac{3}{16}

of the total offspring population. Out of

400

offspring, the expected count is calculated as

\frac{3}{16} \times 400 = 75

.

Step-by-Step Solution

1

Determine the phenotypic ratio from the dihybrid cross

BbSs \times BbSs

.

The expected ratio is

9 : 3 : 3 : 1

for (black coat, short hair) : (black coat, long hair) : (white coat, short hair) : (white coat, long hair).

Mendel's Law of Independent Assortment dictates that the two gene pairs segregate independently during gamete formation.

2

Determine the proportion of offspring showing the black coat and long hair phenotype (

B\_ss

).

The proportion is

\frac{3}{16}

.

The probability of inheriting the dominant coat trait (

B\_

) is

\frac{3}{4}

, and the probability of inheriting the recessive hair length trait (

ss

) is

\frac{1}{4}

. Combined probability =

\frac{3}{4} \times \frac{1}{4} = \frac{3}{16}

.

3

Multiply the proportion by the total population size to find the expected number of offspring.

\frac{3}{16} \times 400 = 75

.

Applying the theoretical phenotypic probability to the sample size of 400 yields the expected count.

Key Concept

Mendel's Law of Independent Assortment and Dihybrid Phenotypic Ratios

Estimated Time:1m 30s

Question 323Question →

At a commercial maize farm operating with fixed land and equipment, employing $4$ farm workers yields an average product of $30\text{ crates}$ of maize. When a $5\text{th}$ worker is hired, the marginal product contributed by this worker is $20\text{ crates}$ . What is the average product of labor when $5$ workers are employed?

Show answer & explanation

Answer: 28

Answer

The average product of labor when 5 workers are employed is 28 crates.

To determine the average product (

AP

) when

5

workers are employed, first calculate the total product (

TP

) for

4

workers:

4 \times 30 = 120\text{ crates}

. Next, add the marginal product (

MP

) of the

5\text{th}

worker to find total output for

5

workers:

120 + 20 = 140\text{ crates}

. Finally, divide total output by the total number of workers (

5

):

140 / 5 = 28\text{ crates}

.

Step-by-Step Solution

1

Calculate total product (

TP

) for 4 workers

TP_4 = 120\text{ crates}

Total product equals average product multiplied by total units of labor (

TP = AP \times L

).

2

Calculate total product (

TP

) for 5 workers

TP_5 = 140\text{ crates}

Total product with 5 workers is the sum of previous total product and the marginal product of the 5th worker (

TP_5 = TP_4 + MP_5

).

3

Compute average product (

AP

) for 5 workers

AP_5 = 28\text{ crates}

Average product is calculated by dividing total product by total units of variable input (

AP = TP / L

).

Key Concept

Relationship between Total Product, Average Product, and Marginal Product in Short-Run Production

Question 324Question →

A consumer derives a total utility worth $\text{N} 1,500$ from consuming $5$ units of a commodity. If the market price of the commodity is $\text{N} 200$ per unit, what is the consumer surplus in Naira?

Show answer & explanation

Answer: 500

Answer

The consumer surplus is

\text{N} 500

.

Consumer surplus is calculated as Total Utility (total willingness to pay) minus Total Expenditure (

P \times Q

). Here, Total Utility is

\text{N} 1,500

, and Total Expenditure is

5 \times \text{N} 200 = \text{N} 1,000

. Subtracting

\text{N} 1,000

from

\text{N} 1,500

gives a consumer surplus of

\text{N} 500

.

Step-by-Step Solution

1

Calculate total actual expenditure on the commodity

Total Expenditure =

5 \times \text{N} 200 = \text{N} 1,000

Total expenditure is the actual amount spent by the consumer, found by multiplying price per unit by the number of units bought.

2

Subtract total expenditure from total utility to find consumer surplus

Consumer Surplus =

\text{N} 1,500 - \text{N} 1,000 = \text{N} 500

Consumer surplus is the net economic benefit, calculated as the total monetary utility derived minus total expenditure.

Key Concept

Calculation of Consumer Surplus from Total Utility and Total Expenditure

Question 325Question →

A West African country records a general price level ( $P$ ) of $\text{N}250$ per transaction unit and a total volume of physical transactions ( $T$ ) of $800,000$ units per year. If the velocity of money circulation ( $V$ ) is $5$ , calculate the required total money supply ( $M$ ), in millions of naira, according to Fisher's Quantity Theory of Money equation ( $MV = PT$ ).

Show answer & explanation

Answer: 40

Answer

The total money supply (

M

) required is 40 million naira.

According to Irving Fisher's Quantity Theory of Money,

MV = PT

. Substituting

V = 5

,

P = 250

, and

T = 800,000

gives

5M = 200,000,000

. Dividing both sides by

5

yields

M = 40,000,000

naira. Converting to millions of naira gives 40.

Step-by-Step Solution

1

Identify the given variables from the context.

P = 250

,

T = 800,000

,

V = 5

.

These are the parameter inputs required for Fisher's Equation of Exchange.

2

Apply Fisher's Quantity Theory of Money formula.

MV = PT

This formula establishes the macroeconomic equilibrium between monetary flow and total transaction value.

3

Substitute the values and solve for

M

.

5M = 250 \times 800,000 \implies 5M = 200,000,000 \implies M = 40,000,000\text{ naira}

.

Dividing the total transaction expenditure by velocity isolates the money stock.

4

Express the money supply in millions of naira.

40\text{ million naira}

.

The unit requested in the question stem is millions of naira.

Key Concept

Fisher's Quantity Theory of Money (Equation of Exchange

MV = PT

)

Estimated Time:1m 30s

Question 326Question →

A shoe manufacturing firm operates in the short run. When producing $10$ pairs of shoes, its Average Fixed Cost ( $\text{AFC}$ ) is $\text{₦}800$ per pair and its Total Variable Cost ( $\text{TVC}$ ) is $\text{₦}15,000$ . If increasing output to $11$ pairs raises the firm's Total Cost ( $\text{TC}$ ) to $\text{₦}25,500$ , what is the Marginal Cost ( $\text{MC}$ ) of the $11\text{th}$ pair of shoes?

Show answer & explanation

Answer: 2500

Answer

The Marginal Cost of producing the 11th pair of shoes is ₦2,500.

To find the Marginal Cost of the 11th unit, we first determine the Total Cost at 10 units. Total Fixed Cost (TFC) is constant and equal to AFC × Q = ₦800 × 10 = ₦8,000. Adding the Total Variable Cost (TVC) of ₦15,000 gives an initial Total Cost (TC₁) of ₦23,000. When output increases to 11 units, Total Cost (TC₂) becomes ₦25,500. The Marginal Cost is the change in Total Cost per unit change in output: ₦25,500 - ₦23,000 = ₦2,500.

Step-by-Step Solution

1

Calculate Total Fixed Cost (TFC) at 10 units

TFC = ₦800 × 10 = ₦8,000

Average Fixed Cost is Total Fixed Cost divided by quantity (AFC = TFC / Q), so TFC = AFC × Q.

2

Calculate Total Cost (TC₁) for 10 units

TC₁ = ₦8,000 + ₦15,000 = ₦23,000

Total Cost is the sum of Total Fixed Cost and Total Variable Cost (TC = TFC + TVC).

3

Calculate Marginal Cost (MC) for the 11th unit

MC = ₦25,500 - ₦23,000 = ₦2,500

Marginal Cost measures the change in total cost resulting from producing one additional unit of output (MC = ΔTC / ΔQ).

Key Concept

Short-Run Cost Identities and Marginal Cost Calculation

Question 327Question →

An ideal gas occupies a volume of $0.05\text{ m}^3$ inside a rigid container. If the gas exerts a pressure of $2.4 \times 10^5\text{ N m}^{-2}$ on the walls of the container, what is the total translational kinetic energy of the gas molecules in joules?

Show answer & explanation

Answer: 18000

Answer

The total translational kinetic energy of the gas molecules is

18000\text{ J}

.

According to the kinetic theory of gases, the pressure

P

of an ideal gas is related to its total translational kinetic energy

E_k

and volume

V

by

P = \frac{2}{3} \frac{E_k}{V}

. Rearranging for

E_k

gives

E_k = \frac{3}{2} P V

. Substituting

P = 2.4 \times 10^5\text{ N m}^{-2}

and

V = 0.05\text{ m}^3

yields

E_k = \frac{3}{2} \times 2.4 \times 10^5 \times 0.05 = 18000\text{ J}

.

Step-by-Step Solution

1

Identify the relationship between gas pressure, volume, and translational kinetic energy from kinetic theory.

P = \frac{2}{3} \left(\frac{E_k}{V}\right) \implies E_k = \frac{3}{2} P V

From kinetic theory, pressure is two-thirds of the total translational kinetic energy per unit volume.

2

Substitute the provided numerical values into the equation.

E_k = \frac{3}{2} \times (2.4 \times 10^5\text{ N m}^{-2}) \times (0.05\text{ m}^3)

The given values are pressure

P = 2.4 \times 10^5\text{ N m}^{-2}

and volume

V = 0.05\text{ m}^3

.

3

Evaluate the expression to determine the numerical result.

E_k = 1.5 \times 12000 = 18000\text{ J}

Multiplying the values gives the energy in Joules.

Key Concept

Relationship between pressure, volume, and total translational kinetic energy of gas molecules (

E_k = \frac{3}{2} P V

).

Question 328Question →

A firm operating in an imperfectly competitive market sells 3 units of a commodity at a price of ₦40 per unit. When output increases to 4 units, the unit price drops to ₦35. What is the marginal revenue, in Naira (₦), generated from selling the 4th unit?

Show answer & explanation

Answer: 20

Answer

The marginal revenue generated from selling the 4th unit is ₦20.

The correct value of ₦20 is obtained by finding the difference between Total Revenue at 4 units (₦140) and Total Revenue at 3 units (₦120).

Step-by-Step Solution

1

Calculate Total Revenue at 3 units (

TR_3

)

TR_3 = 3 \times 40 = 120

Total Revenue is obtained by multiplying Price by Quantity (

TR = P \times Q

).

2

Calculate Total Revenue at 4 units (

TR_4

)

TR_4 = 4 \times 35 = 140

Total Revenue at the increased output level is the new Price multiplied by the new Quantity.

3

Calculate Marginal Revenue (

MR

)

MR_4 = 140 - 120 = 20

Marginal Revenue is the addition to Total Revenue resulting from selling one extra unit (

MR = \Delta TR / \Delta Q

).

Key Concept

Calculation of Marginal Revenue from Price and Quantity in Imperfect Competition

Question 329Question →

In a competitive wholesale market for cement, the daily quantity demanded is given by the linear demand function $Q_d = 450 - 12P$ and the daily quantity supplied is given by $Q_s = -50 + 13P$ , where $P$ is the price per bag in hundreds of Naira and $Q$ is measured in metric tons. What is the equilibrium quantity of cement traded in metric tons?

Show answer & explanation

Answer: 210

Answer

The equilibrium quantity of cement traded daily is 210 metric tons.

Market equilibrium occurs at the point where quantity demanded equals quantity supplied (

Q_d = Q_s

). Equating

450 - 12P = -50 + 13P

yields

500 = 25P

, which solves to an equilibrium price of

P = 20

. Substituting

P = 20

into the demand function gives

Q^* = 450 - 12(20) = 210

metric tons.

Step-by-Step Solution

1

Set quantity demanded equal to quantity supplied to establish market equilibrium.

450 - 12P = -50 + 13P

Market equilibrium occurs at the price level where

Q_d = Q_s

.

2

Group like terms to solve for the equilibrium price (

P

).

450 + 50 = 13P + 12P \implies 500 = 25P \implies P = 20

Adding

50

and

12P

to both sides isolates the variable

P

.

3

Substitute the equilibrium price (

P = 20

) back into the demand function to find equilibrium quantity (

Q^*

).

Q^* = 450 - 12(20) = 450 - 240 = 210

metric tons

Evaluating either the demand or supply function at

P = 20

gives the market clearing quantity.

Key Concept

Market Equilibrium Quantity Determination

Question 330Question →

The weekly demand function for cocoa in a competitive market is expressed as $Q_d = 650 - 15P$ and the supply function is expressed as $Q_s = -150 + 25P$ , where $P$ represents the price in Naira per bag, $Q_d$ is the quantity demanded, and $Q_s$ is the quantity supplied. What is the market equilibrium quantity in bags?

Show answer & explanation

Answer: 350

Answer

The market equilibrium quantity is 350 bags.

Equating quantity demanded and quantity supplied (

650 - 15P = -150 + 25P

) gives

40P = 800

, which results in an equilibrium price of

P = 20

Naira. Substituting

P = 20

into the demand function gives

Q = 650 - 15(20) = 350

bags.

Step-by-Step Solution

1

Equate quantity demanded (Q_d) to quantity supplied (Q_s) to solve for the market equilibrium price.

650 - 15P = -150 + 25P, which simplifies to 40P = 800, yielding P = 20 Naira.

Market equilibrium occurs at the price level where quantity demanded equals quantity supplied.

2

Substitute the calculated equilibrium price (P = 20) back into the demand or supply equation to compute the equilibrium quantity.

Q = 650 - 15(20) = 350 bags.

Evaluating either market function at the equilibrium price determines the quantity cleared by the market.

Key Concept

Market Equilibrium Price and Quantity Determination

Question 331Question →

During a financial review, a government reported the following public revenue figures for the quarter:

Revenue Source	Amount ( $\text{₦}$ )
Company Income Tax	$350\text{ billion}$
Customs Import Duties	$210\text{ billion}$
Mining Royalties	$90\text{ billion}$
Passport and License Fees	$30\text{ billion}$
Regulatory Fines	$20\text{ billion}$

What is the total non-tax revenue earned by the government in billions of Naira?

Show answer & explanation

Answer: 140

Answer

The total non-tax revenue earned by the government is 140 billion Naira.

Non-tax revenue includes all income generated by public authorities from sources other than taxes, such as commercial receipts, administrative fees, fines, and natural resource royalties. Summing Mining Royalties (₦90 billion), Passport and License Fees (₦30 billion), and Regulatory Fines (₦20 billion) gives 140 billion Naira.

Step-by-Step Solution

1

Classify each revenue item as either tax revenue or non-tax revenue.

Company Income Tax (₦350 billion) and Customs Import Duties (₦210 billion) are tax revenues. Mining Royalties (₦90 billion), Passport and License Fees (₦30 billion), and Regulatory Fines (₦20 billion) are non-tax revenues.

Taxes are compulsory levies imposed by government authority, whereas non-tax revenues consist of income from administrative fees, penalties, and state concessions/assets.

2

Sum the values of all non-tax revenue items.

90 + 30 + 20 = 140 billion Naira.

Combining the non-tax receipts yields the total non-tax revenue earned.

Key Concept

Classification of Government Revenue (Tax vs. Non-Tax Revenue)

Question 332Question →

A specific tax of ₦60 per unit is imposed on a commodity, causing its equilibrium price to increase from ₦150 to ₦195. What is the amount of the tax burden per unit borne by the producer?

Show answer & explanation

Answer: 15

Answer

The tax burden per unit borne by the producer is ₦15.

The effective incidence of a tax depends on how much the price rises for consumers versus how much net revenue producers retain. Since the market price rises by ₦45 (from ₦150 to ₦195), consumers pay ₦45 of the tax. The producer absorbs the remaining ₦15 of the total ₦60 tax per unit.

Step-by-Step Solution

1

Determine the consumer's share of the tax burden

₦195 - ₦150 = ₦45

The portion of tax shifted to consumers is reflected directly in the market price increase.

2

Determine the producer's share of the tax burden

₦60 - ₦45 = ₦15

The total tax per unit is split between the consumer and producer; subtracting the consumer's burden gives the producer's burden.

Key Concept

Incidence of Taxation and Share of Tax Burden

Estimated Time:1m 0s

Question 333Question →

In a fiscal year budget, a state government allocated its total public expenditure of ₦500 billion as follows:

Expenditure Item	Allocation (₦ Billion)
Civil servants' salaries and allowances	175
Construction of roads, hospitals, and schools	150
Payment of interest on public debt	75
General administrative overheads	100

What is the percentage share of capital expenditure in the total public expenditure?

Show answer & explanation

Answer: 30

Answer

The percentage share of capital expenditure in total public expenditure is 30%.

Capital expenditure comprises government spending dedicated to infrastructure and physical asset creation (roads, hospitals, schools = ₦150 billion). Total spending is ₦500 billion. The percentage share is calculated as (150 / 500) × 100 = 30%.

Step-by-Step Solution

1

Classify expenditure items into capital and recurrent spending.

Capital expenditure = ₦150 billion (construction of roads, hospitals, and schools). Recurrent expenditure = ₦175 billion (salaries) + ₦75 billion (debt interest) + ₦100 billion (overheads) = ₦350 billion.

Capital expenditure involves spending on non-current physical assets that provide long-term economic returns, whereas recurrent expenditure covers day-to-day operational costs and debt service obligations.

2

Confirm total public expenditure.

Total expenditure = ₦150 billion + ₦350 billion = ₦500 billion.

Total public expenditure is the sum of total capital expenditure and total recurrent expenditure.

3

Calculate the proportion of capital expenditure as a percentage.

(₦150 billion / ₦500 billion) × 100 = 30%.

Dividing capital expenditure by total public expenditure yields the share, which is converted to a percentage by multiplying by 100.

Key Concept

Public expenditure classification into capital and recurrent categories and calculation of budget shares.

Question 334Question →

On a topographic map drawn to a Representative Fraction (RF) scale of $1 : 60,000$ , a linear segment of a river between two hydrological gauging stations measures $22.5\text{ cm}$ . What is the actual ground distance between the two stations in kilometers?

Show answer & explanation

Answer: 13.5

Answer

The actual ground distance between the two stations is

13.5\text{ km}

.

The ground distance is obtained by scaling up the map distance using the Representative Fraction:

22.5\text{ cm} \times 60,000 = 1,350,000\text{ cm}

. Converting to kilometers (

1\text{ km} = 100,000\text{ cm}

) yields

13.5\text{ km}

.

Step-by-Step Solution

1

Calculate the ground distance in centimeters using the Representative Fraction

Ground distance in cm =

22.5\text{ cm} \times 60,000 = 1,350,000\text{ cm}

The RF scale of

1 : 60,000

indicates that

1\text{ cm}

on the map represents

60,000\text{ cm}

on the ground.

2

Convert the ground distance from centimeters to kilometers

Ground distance in km =

\frac{1,350,000\text{ cm}}{100,000\text{ cm/km}} = 13.5\text{ km}

There are

100,000\text{ cm}

in

1\text{ km}

(

100\text{ cm/m} \times 1,000\text{ m/km}

).

Key Concept

Map Scale Conversion and Ground Distance Calculation

Estimated Time:1m 30s

Question 335Question →

A country recorded the following international trade transactions in a given fiscal year:

- Export of agricultural produce: $120 million - Export of crude oil:$ 380 million
- Import of manufactured goods: $290 million - Import of refined petroleum:$ 110 million
- Freight and shipping charges paid to foreign companies: $45 million - Financial and insurance services provided to overseas clients:$ 30 million

Based on the data provided, what is the country's Balance of Trade in millions of dollars?

Show answer & explanation

Answer: 100

Answer

The country's Balance of Trade is $100 million.

The Balance of Trade (BOT) is calculated strictly as the total value of visible exports minus the total value of visible imports. In this scenario, visible exports equal

120 million +

380 million =

500 million, while visible imports equal

290 million +

110 million =

400 million. Subtracting visible imports from visible exports (

500M -

400M) gives a positive Balance of Trade of $100 million. Freight charges and financial services are invisible trade items and must be excluded from Balance of Trade calculations.

Step-by-Step Solution

1

Calculate total visible exports

120 million +

380 million = $500 million

Balance of Trade considers only physical (visible) goods exported out of the country.

2

Calculate total visible imports

290 million +

110 million = $400 million

Balance of Trade considers only physical (visible) goods imported into the country.

3

Filter out invisible trade items

Freight charges (

45M) and financial services (

30M) are excluded

Services and freight are invisible items which belong to the Current Account balance, not the Balance of Trade.

4

Subtract total visible imports from total visible exports

500 million -

400 million = $100 million

Balance of Trade formula is Visible Exports minus Visible Imports.

Key Concept

Balance of Trade vs. Balance of Payments

Question 336Question →

Ade and Baba entered into a joint venture sharing profits and losses in the ratio of 3:2. A separate set of books was maintained for the venture. They opened a Joint Bank Account, contributing ₦500,000 and ₦300,000 respectively.

The venture transactions were as follows:
- Purchases paid through Joint Bank: ₦600,000
- Freight and carriage paid through Joint Bank: ₦40,000
- Storage expenses paid through Joint Bank: ₦20,000
- Carriage paid directly by Ade from personal funds: ₦15,000
- Goods supplied by Baba from his personal stock: ₦80,000
- Sales proceeds deposited into Joint Bank: ₦1,000,000
- Unsold stock taken over by Baba: ₦35,000

Ade is entitled to a 5% commission on sales proceeds for managing the venture.

What is the final amount in Naira (₦) payable to Ade from the Joint Bank Account upon settlement?

Show answer & explanation

Answer: 703000

Answer

The final amount payable to Ade from the Joint Bank Account upon settlement is ₦703,000.

Under the separate set of books method, the Joint Venture Account acts as a profit and loss account. The net profit of ₦230,000 is distributed according to the 3:2 ratio, giving Ade ₦138,000. Ade's personal account is credited with his capital contribution (₦500,000), personal expenses incurred (₦15,000), earned commission (₦50,000), and share of profit (₦138,000), yielding a total final settlement payable of ₦703,000 from the Joint Bank Account.

Step-by-Step Solution

1

Calculate Ade's management commission

₦50,000

Ade is entitled to 5% of total sales proceeds (5% of ₦1,000,000).

2

Determine total expenses and costs in the Joint Venture Account

₦805,000

Sum of all costs: ₦600,000 + ��40,000 + ₦20,000 + ₦15,000 + ₦80,000 + ₦50,000.

3

Determine total income and credits in the Joint Venture Account

₦1,035,000

Sum of sales revenue (₦1,000,000) and agreed value of unsold stock taken over by Baba (₦35,000).

4

Calculate net joint venture profit

₦230,000

Total credits (₦1,035,000) minus total debits (₦805,000).

5

Calculate Ade's share of profit

₦138,000

Profit sharing ratio is 3:2, so Ade receives 3/5 of ₦230,000.

6

Balance Ade's Personal Account to find final cash settlement

₦703,000

Credit Ade's account with capital contribution (₦500,000), expenses incurred (₦15,000), commission (₦50,000), and profit share (₦138,000).

Key Concept

Joint Venture Accounting: Separate Set of Books Method

Estimated Time:2m 30s

Question 337Question →

The following balances were extracted from the financial records of Horizon Athletic Club as of 1st January 2024:

Item	Amount ( $\text{N}$ )
Clubhouse building	500,000
Sports equipment	180,000
Cash at bank	45,000
Subscriptions in arrears	12,000
Prepaid insurance	8,000
Accrued wages	15,000
Subscriptions received in advance	10,000

Calculate the accumulated fund of the club as of 1st January 2024 in Naira ( $\text{N}$ ).

Show answer & explanation

Answer: 720000

Answer

The accumulated fund of Horizon Athletic Club as of 1st January 2024 is N720,000.

The accumulated fund of a non-profit organization is determined by taking the total value of assets and subtracting all liabilities as of a specific date. Adding all asset balances (Clubhouse building

\text{N}500,000

, Sports equipment

\text{N}180,000

, Cash at bank

\text{N}45,000

, Subscriptions in arrears

\text{N}12,000

, and Prepaid insurance

\text{N}8,000

) gives total assets of

\text{N}745,000

. Summing liability items (Accrued wages

\text{N}15,000

and Subscriptions received in advance

\text{N}10,000

) gives total liabilities of

\text{N}25,000

. Subtracting liabilities from assets results in

\text{N}745,000 - \text{N}25,000 = \text{N}720,000

.

Step-by-Step Solution

1

Calculate Total Assets as of 1st January 2024

Total Assets = N745,000

Assets comprise non-current assets (Clubhouse building N500,000; Sports equipment N180,000), current assets (Cash at bank N45,000; Prepaid insurance N8,000), and accrued income due to the club (Subscriptions in arrears N12,000).

2

Calculate Total Liabilities as of 1st January 2024

Total Liabilities = N25,000

Liabilities include expenses owing by the club (Accrued wages N15,000) and income collected for subsequent periods (Subscriptions received in advance N10,000).

3

Deduct Total Liabilities from Total Assets to compute Accumulated Fund

Accumulated Fund = N720,000

Accumulated Fund represents the capital equivalent for non-profit entities, computed as Total Assets minus Total Liabilities at the opening date.

Key Concept

Accumulated Fund in Non-Profit Organizations

Question 338Question →

As at 31st December 2025, the Cash Book (bank column) of Zenith Enterprises showed an unadjusted credit balance (overdraft) of $\text{NGN } 14,500$ . Upon audit and comparison with the Bank Statement, the following discrepancy items were identified:

Item	Transaction Details	Amount (NGN)
1	Bank charges and interest on overdraft not entered in Cash Book	$2,050$
2	Direct remittance by a customer credited directly by the bank	$5,400$
3	Cheque issued to a supplier for $\text{NGN } 3,100$ incorrectly credited in Cash Book as	$1,300$
4	Cheques drawn and issued to creditors but not yet presented at bank	$8,900$
5	Cheques lodged into the bank account but not yet credited by bank	$6,200$
6	Standing order for annual subscriptions debited by bank only	$2,000$
7	Customer's cheque previously deposited, now returned dishonoured	$1,500$

What is the amount of the bank overdraft per the Bank Statement as at 31st December 2025?

Show answer & explanation

Answer: 13750

Answer

The bank overdraft per the Bank Statement as at 31st December 2025 is NGN 13,750.

To find the Bank Statement balance, first adjust the Cash Book overdraft of NGN 14,500. Add omitted payments and corrections (bank charges NGN 2,050, cheque under-recording NGN 1,800, standing order NGN 2,000, dishonoured cheque NGN 1,500) to get an overdraft subtotal of NGN 21,850. Subtract the direct credit of NGN 5,400 to obtain an Adjusted Cash Book overdraft of NGN 16,450. Reconciling to the bank statement: add uncredited lodgements of NGN 6,200 and subtract unpresented cheques of NGN 8,900, yielding a Bank Statement overdraft of NGN 13,750.

Step-by-Step Solution

1

Calculate net Cash Book adjustments

Additional debits (increasing overdraft): Bank charges and interest (NGN 2,050) + Cheque error correction (NGN 3,100 - NGN 1,300 = NGN 1,800) + Standing order (NGN 2,000) + Dishonoured cheque (NGN 1,500) = NGN 7,350. Additional credits (reducing overdraft): Direct customer credit = NGN 5,400.

Unrecorded payments and under-recorded credit entries increase the Cash Book overdraft, while unrecorded receipts reduce it.

2

Determine the Adjusted Cash Book Balance

Adjusted Cash Book Overdraft = NGN 14,500 + NGN 7,350 - NGN 5,400 = NGN 16,450.

Adjusting the initial overdraft balance for all items omitted or misposted in the Cash Book.

3

Calculate the Bank Statement Overdraft Balance

Bank Statement Overdraft = Adjusted Cash Book Overdraft (NGN 16,450) + Uncredited Lodgements (NGN 6,200) - Unpresented Cheques (NGN 8,900) = NGN 13,750.

Uncredited lodgements increase the bank's perception of overdraft relative to the adjusted cash book, while unpresented cheques reduce the bank statement overdraft.

Key Concept

Preparation of Adjusted Cash Book and Bank Reconciliation Statement under overdraft conditions

Estimated Time:3m 0s

Question 339Question →

Tayo and Emeka entered into a joint venture to supply construction materials, maintaining a separate set of books. Tayo contributed $\text{₦}400,000$ and Emeka contributed $\text{₦}200,000$ into a Joint Bank Account. Materials purchased using Joint Bank funds cost $\text{₦}350,000$ , and direct expenses paid from the Joint Bank totaled $\text{₦}150,000$ . Tayo paid additional transport costs of $\text{₦}30,000$ from his personal funds. Total sales proceeds of $\text{₦}750,000$ were deposited into the Joint Bank, while Emeka took over unsold inventory valued at $\text{₦}40,000$ . Profits and losses are shared between Tayo and Emeka in the ratio $3:2$ . What is the net profit of the joint venture in Naira?

Show answer & explanation

Answer: 260000

Answer

The net profit of the joint venture is

\text{₦}260,000

.

To find the net profit of the joint venture, construct the Joint Venture Account under the separate set of books method. Debits include materials (

\text{₦}350,000

), direct bank expenses (

\text{₦}150,000

), and transport costs incurred personally by Tayo (

\text{₦}30,000

), totaling

\text{₦}530,000

. Credits include sales proceeds deposited into the Joint Bank (

\text{₦}750,000

) plus unsold inventory absorbed by Emeka (

\text{₦}40,000

), totaling

\text{₦}790,000

. The net venture profit is the excess of credits over debits:

\text{₦}790,000 - \text{₦}530,000 = \text{₦}260,000

.

Step-by-Step Solution

1

Determine total credits to the Joint Venture Account.

Total Credits = Cash Sales + Unsold Inventory Taken Over =

\text{₦}750,000 + \text{₦}40,000 = \text{₦}790,000

.

In separate set of books accounting, sales revenues and inventory taken over by co-venturers represent venture income and are credited to the Joint Venture Account.

2

Determine total debits to the Joint Venture Account.

Total Debits = Materials Purchased + Direct Expenses + Venturer Personal Expenses =

\text{₦}350,000 + \text{₦}150,000 + \text{₦}30,000 = \text{₦}530,000

.

All expenditure incurred for the venture, whether disbursed from the Joint Bank Account or directly by a venturer, must be debited to the Joint Venture Account.

3

Compute net profit by taking the difference between total credits and total debits.

Net Profit =

\text{₦}790,000 - \text{₦}530,000 = \text{₦}260,000

.

An excess of total revenue/credit entries over total cost/debit entries indicates the profit earned by the joint venture.

Key Concept

Calculation of Net Venture Profit in Separate Set of Books Method

Estimated Time:1m 30s

Question 340Question →

Musa and Chidi are partners in a firm sharing profits and losses in the ratio $3:2$ . On 1st January 2025, their capital balances were $\text{\mathbb{N}}500,000$ and $\text{\mathbb{N}}300,000$ respectively.

During the year ended 31st December 2025, the following transactions occurred:
- On 1st July 2025, Musa introduced an additional capital of $\text{\mathbb{N}}100,000$ , while Chidi withdrew $\text{\mathbb{N}}50,000$ of his capital.
- Partnership deed allows interest on capital at $10\%$ per annum on time-proportioned capital.
- Chidi is entitled to an annual partner salary of $\text{\mathbb{N}}40,000$ .
- Interest on drawings is charged at $5\%$ per annum. Musa drew $\text{\mathbb{N}}60,000$ on 1st April 2025, and Chidi drew $\text{\mathbb{N}}40,000$ on 1st October 2025.
- On 1st March 2025, Musa advanced a loan of $\text{\mathbb{N}}100,000$ to the firm. Interest on partner loan is payable at $6\%$ per annum.
- The net profit of the firm before accounting for interest on Musa's loan for the year was $\text{\mathbb{N}}250,000$ .

If the partnership maintains fluctuating capital accounts, what is the closing balance of Musa's capital account as at 31st December 2025 (in $\text{\mathbb{N}}$ )?

Show answer & explanation

Answer: 667900

Answer

The closing balance of Musa's fluctuating capital account as at 31st December 2025 is NGN 667,900.

Under the fluctuating capital method, all transactions affecting a partner—including opening capital, additional capital introduced, interest on capital, share of profits, drawings, and interest on drawings—are combined into a single capital account. The closing balance of NGN 667,900 is obtained by adding all credit items (opening balance NGN 500,000 + additional capital NGN 100,000 + interest on capital NGN 55,000 + share of profit NGN 75,150 = NGN 730,150) and subtracting all debit items (drawings NGN 60,000 + interest on drawings NGN 2,250 = NGN 62,250). Note that interest on Musa's loan (NGN 5,000) is a charge against firm income in the Profit and Loss Account and credited to a separate Loan Account, so it reduces the net profit available for appropriation to NGN 245,000 but does not directly enter the capital account.

Step-by-Step Solution

1

Calculate interest on partner loan and net profit after loan interest

Loan interest = 6% * NGN 100,000 * (10/12) = NGN 5,000. Adjusted Net Profit = NGN 250,000 - NGN 5,000 = NGN 245,000.

Interest on a partner loan is a charge against profit (P&L expense), not an appropriation of profit.

2

Compute time-apportioned interest on capital for each partner

Musa: (10% * NGN 500,000) + (10% * NGN 100,000 * 6/12) = NGN 55,000. Chidi: (10% * NGN 300,000) - (10% * NGN 50,000 * 6/12) = NGN 27,500. Total = NGN 82,500.

Capital introduced or withdrawn mid-year must be time-apportioned to determine accurate interest on capital.

3

Compute interest on drawings for each partner

Musa: 5% * NGN 60,000 * (9/12) = NGN 2,250. Chidi: 5% * NGN 40,000 * (3/12) = NGN 500. Total = NGN 2,750.

Interest on drawings is calculated from the date of withdrawal to the end of the accounting period.

4

Determine divisible residual profit and Musa's share

Divisible Profit = NGN 245,000 + NGN 2,750 - NGN 82,500 - NGN 40,000 = NGN 125,250. Musa's share (3/5) = NGN 75,150.

Appropriations (salary and interest on capital) are deducted from available profit, and interest on drawings is added.

5

Calculate Musa's closing balance under the fluctuating capital method

Musa's Closing Capital = NGN 500,000 (opening) + NGN 100,000 (addition) + NGN 55,000 (interest on capital) + NGN 75,150 (profit share) - NGN 60,000 (drawings) - NGN 2,250 (interest on drawings) = NGN 667,900.

Under the fluctuating capital method, all adjustments (additions, drawings, interest, salary, and profit shares) pass directly through a single capital account.

Key Concept

Fluctuating Capital Account Preparation and Profit & Loss Appropriation Adjustments

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