JAMB Accounts Principles of Accounts 2019 Paper

Concept:Retained profit is the amount left after charging all appropriations, such as dividends, transfers to reserves, tax, and goodwill write-off, to the profit available.Explanation:Total profit available = Net profit b/d + Profit and loss balance b/d$= \text{₦}27{,}370 + \text{₦}28{,}200 = \text{₦}55{,}570$.Final ordinary dividend $= 5\%$ of ordinary share capital of $\text{₦}100{,}000$$= \text{₦}5{,}000$.Total appropriations are:General reserve $\text{₦}4{,}100$; Corporation tax $\text{₦}2{,}500$; Preference dividend $\text{₦}2{,}100$; Final ordinary dividend $\text{₦}5{,}000$; Interim ordinary dividend $\text{₦}4{,}050$; Goodwill written off $\text{₦}1{,}500$.Total appropriations $= \text{₦}19{,}250$.Retained profit $= \text{₦}55{,}570 - \text{₦}19{,}250 = \text{₦}36{,}320$.Answer:B. $\text{₦}36{,}320$