Question

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SCHOOL OF BUSINESS, ECONOMICS AND MANAGEMENT
AFIN 102- FINANCIAL ACCOUNTING
ASSIGNMENT 01
Due Date: 25th September, 2020
Instructions: The worksheets showing all account entries is to be uploaded in PDF format only. Use the solutions on the worksheet to answer the questions in the accompanying quiz-setup.
QUESTION
Mr J. Walker, a trader in Lusaka’s Kamwala area, has not been keeping books of accounts till now when he has hired you to be his book keeper. The following are the opening balances on May 1, and the transactions for the operations of the month:
May 2019
1 Assets: Premises K34,000; Van K5,125; Fixtures K810; Inventory K6,390; Accounts receivable: P. Mullen K140, F. Lane K310; Cash at bank K6,240; Cash in hand K560.
Liabilities: Accounts payable: S. Hood K215, J Brown K640.
2 Paid storage costs by cheque K40.
3 Goods bought on credit from; S. Hood K145; D. Main K206; W. Tone K96; R. Foot K66.
4 Goods sold on credit to: J. Wilson K112; T. Cole K164; F. Syme K208; J. Allen K91; P. White K242; F. Lane K90.
7 Paid for motor expenses in cash K60.
9 Cash drawings by proprietor K150.
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11 Goods sold on credit to: T. Cole K68; J. Fox K131.
14 Goods returned to Walker by; J. Wilson K32; F. Syme K48.
16 Bought another van on credit from Abel Motors Ltd K4,850.
19 The following paid Walker their accounts by cheque less 5 per cent cash discount: P. Mullen; F. Lane; J. Wilson; F. Syme.
22 Goods returned by Walker to R. Foot K6.
24 Goods bought on credit from: L. Mole K183; W. Wright K191.
27 The following accounts were settled by Walker by cheque less 5 per cent cash discount: S. Hood; J. Brown; R. Foot.
27 Salaries paid by cheque K740.
30 Paid business rates by cheque K140.
31 Paid Abel Motors Ltd a cheque for K4,850.
Required:
i. Post the journal entries for the opening balances complete with narrations.
ii. Record the daily transactions in the appropriate book of original entry.
iii. Open the appropriate accounts in the Purchases Ledger, Sales Ledger, and the General Ledger and post the transactions.
iv. Balance off the General Ledger accounts.
v. Prepare the closing Trial Balance as at 31 May 2019.
[Total: 25 Marks]

Answer 1

Solution:-

1) Journal Entry For opening Balance:

Date	Particulars	Amount	Amount
May 1	Premises A/c Dr.	34,000
	Van A/c Dr.	5,125
	Fixtures A/c Dr.	810
	Inventory A/c Dr.	6,390
	Account Receivable A/c	450
	Cash at Bank A/c	6,240
	Cash in Hand A/c	560
	To Accounts Payable A/c		855
	To Capital A/c		52720
	(For Assets and Liabilities brought Forward)

2. Journal Entry

Date	Particulars	Amount	Amount
May2	Storage Expenses A/c Dr.	40
	To Bank A/c		40
	(For storage Expenses paid)
May 3	Purchases A/c Dr.	513
	To S. Hood		145
	To D. Main		206
	To D. Tone		96
	To R. Foot		66
	(For goods Purchased on Credit)
May 4	J. Wilson	112
	T. Cole	164
	F. Syme	208
	J. Allen	91
	P.White	242
	F. Lane	90
	To Sales A/c		907
	( For goods sold on Credit)
May 7	Motor Expenses A/c Dr.	60
	To Cash A/c		60
	(For motor Expenses Paid)
May 9	Drawings A/c Dr.	150
	To Cash A/c		150
	(For cash Drawings by Proprietor)
May 11	T. Cole	68
	J. Fox	131
	To Sales A/c		199
	(For goods sold on credit)
May 14	Sales Return A/c Dr.	80
	To J. Wilson		32
	To F. Syme		48
	( For sales return by j. Wilson and F. Syme)
May 16	VAN A/c Dr.	4,850
	To Abel Motors Ltd.		4,850
	(For van bought in credit)
May 19	Bank a/c Dr.
	Discount Allowed A/c Dr.
	To