Answered: The following balances were extracted…

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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Q.1 The following balances were extracted from the books of ALL DIE BE DIE Enterprise for the month of August 2020. Office Furniture GH₵150,000 Cash on hand GH₵ 70,000 Bank Balance GH₵200,000 Debtors: Ascertain GH₵ 1,200 Freeman GH₵8,000 Creditors Suzzy GH₵ 26,000 Pao GH₵14,000 The following transactions took place during the month of September 2020: 1 Paid cash 13,000 for rent. 2 Credit Sales: Ascertain GH₵50,000, Joe GH₵55,000 Freeman GH₵117,000. 3 Cash Sales GH₵150,000. 4 Credit Purchases: Suzzy GH₵30,000, Jane GH₵35,000, Pao GH₵59,000. 4 Received cheques Ascertain: GH₵40,000, Joe GH₵1,000, Freeman GH₵ 96000 6 Paid cheques: Suzzy GH₵ 24,000 (Discount GH₵2,000), Jane GH₵20,000, Pao GH₵40,000. 8 Return Inwards: Ascertain 10,000, Joe GH₵1,000, Freeman GH₵3,000 10 Return Outwards: Jane GH₵3,000, Pao GH₵1,000. 12 Credit Sales: Ascertain GH₵50,000, Joe GH₵40,000, Freeman GH₵15,000. 15 Cash Sales GH₵180,000 16 Paid Insurance GH₵50,000 16 Credit purchases: Jane GH₵12,500, Pao GH₵20,500, Suzzy GH₵18,000 17 Cash Sales GH₵120,000. 17 Received Cheques: Ascertain GH₵20,000 (Discount GH₵ 1,000) Joe GH₵27,000, Freeman GH₵ 8,500 (Discount 1,500). 18 Paid cheques Suzzy GH₵15,000, Jane GH₵GH₵18,000 (Discount GH₵500) Pao GH₵ 21,000 (Discount GH₵ 1,500). 20 Cash purchases GH₵120,000 2 25 Paid cash into Bank GH₵150,000 28 Purchased office furniture by cheque GH₵250,000 Required: i. Write up the above transactions in the relevant Books of Original Entry and determine the Opening Capital ii. Write up the three - column cash book. iii. Post to the relevant personal and impersonal ledgers. iv. Prepare a Trial Balance. 2

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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