Mr J Mwero, a wholesale merchant had the following balances in his ledger at 1 March 2019. Cash in hand Sh.3,000; Bank overdraft Sh.7,000; Motor vans Sh.56,000; Furniture and Equipment Sh.11,900; Creditor (R. Osoro) Sh.4,800; Debtor (B. Anyumba) Sh.3,000; Capital Sh.20,000; Loan from Kokise Investment Ltd. Sh. 42,100. At the end of the month, Mr. J Mwero was able to provide the following information from his records: Cash Transactions: I) Receipts - March 7: Cash Sales - Sh.1,200 “ 26: Cash from bank - Sh.3,500 ii) Payments - March 10: Electricity - Shs.200 “ 14: Salaries - Sh.1,800 “ 25: Postage and Stationery - Sh.960 Bank Transactions: i) Receipts - March 17: B. Anyumba - Sh.48,000 ii) Payment - March 20: R. Osoro - Sh. 20,600 in full Settlement less Sh.200 cash discount March 27: Kokise Investment Ltd. - Shs.2,100 Other Transactions: March 5: Purchase goods - Sh.16,000 from R Osoro March 11: Sold goods to B Anyumba - Shs.50,000 March 13: Bought office chair - Sh.280 on credit from United Furniture mart March 15: B Anyumba returned goods worth Sh.150 Required, Open accounts in Mr J Mwero’s ledger and post above transactions in the ledger and the three column cash book.

Mr J Mwero, a wholesale merchant had the following balances in his ledger at 1 March 2019. Cash in hand Sh.3,000; Bank overdraft Sh.7,000; Motor vans Sh.56,000; Furniture and Equipment Sh.11,900; Creditor (R. Osoro) Sh.4,800; Debtor (B. Anyumba) Sh.3,000; Capital Sh.20,000; Loan from Kokise Investment Ltd. Sh. 42,100. At the end of the month, Mr. J Mwero was able to provide the following information from his records: Cash Transactions: I) Receipts - March 7: Cash Sales - Sh.1,200 “ 26: Cash from bank - Sh.3,500 ii) Payments - March 10: Electricity - Shs.200 “ 14: Salaries - Sh.1,800 “ 25: Postage and Stationery - Sh.960 Bank Transactions: i) Receipts - March 17: B. Anyumba - Sh.48,000 ii) Payment - March 20: R. Osoro - Sh. 20,600 in full Settlement less Sh.200 cash discount March 27: Kokise Investment Ltd. - Shs.2,100 Other Transactions: March 5: Purchase goods - Sh.16,000 from R Osoro March 11: Sold goods to B Anyumba - Shs.50,000 March 13: Bought office chair - Sh.280 on credit from United Furniture mart March 15: B Anyumba returned goods worth Sh.150 Required, Open accounts in Mr J Mwero’s ledger and post above transactions in the ledger and the three column cash book.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Mr J Mwero, a wholesale merchant had the following balances in his ledger at 1 March 2019.

Cash in hand Sh.3,000; Bank overdraft Sh.7,000; Motor vans Sh.56,000; Furniture and Equipment Sh.11,900; Creditor (R. Osoro) Sh.4,800; Debtor (B. Anyumba) Sh.3,000; Capital Sh.20,000; Loan from Kokise Investment Ltd. Sh. 42,100.

At the end of the month, Mr. J Mwero was able to provide the following information from his records:

Cash Transactions:

I) Receipts - March 7: Cash Sales - Sh.1,200

“ 26: Cash from bank - Sh.3,500

ii) Payments - March 10: Electricity - Shs.200

“ 14: Salaries - Sh.1,800

“ 25: Postage and Stationery - Sh.960

Bank Transactions:

i) Receipts - March 17: B. Anyumba - Sh.48,000
ii) Payment - March 20: R. Osoro - Sh. 20,600 in full

Settlement less Sh.200 cash discount

March 27: Kokise Investment Ltd. - Shs.2,100

Other Transactions:

March 5: Purchase goods - Sh.16,000 from R Osoro

March 11: Sold goods to B Anyumba - Shs.50,000

March 13: Bought office chair - Sh.280 on credit from United Furniture mart

March 15: B Anyumba returned goods worth Sh.150

Required,

Open accounts in Mr J Mwero’s ledger and post above transactions in the ledger and the three column cash book.
Balance the accounts and extract a Trial Balance as at 31March 2019.

Definition Definition Financial journal in which only cash-related transactions are recorded. Cash transactions are posted chronologically in the cash book, which is also called a subsidiary book. All the cash receipts are recorded on the debit side and all the cash payments are recorded on the credit side. An important point to remember is that the cash book never shows a credit balance; only a debit balance is shown in the cash book.

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