1 answer

Answer all questions in this Section. 1. Read the following and answer questions that follow. The...

Question:

Answer all questions in this Section.

1. Read the following and answer questions that follow.

The following information was taken from Masego Leero’s books.

01/01/2015 Started business with P20, 000 cash

03/01/2015 Deposited P15, 000 cash into the bank account

05/01/2015 Bought furniture on credit P3, 000 from Supreme

07/01/2015 Bought goods P7, 000 paying by cheque.

09/01/2015 Sold goods P6, 000 by cash

11/01/2015 Sold goods on credit to Lesego R P1, 000, Lorato L P2, 000 and Kago M P3, 000

13/01/2015 Kago M returned goods P300, Lorato L returned goods P200 to the business

15/01/2015 Bought goods from Sefalana worth P5, 000 and paid P3, 000 deposit by cheque

17/01/2015 Returned P500 goods to Sefalana

19/01/2015 Paid a cab for transporting goods in the business P300 by cash.

21/01/2015 Lesego R paid us P500 cash, Lorato L and Kago M paid us the amount owed by cheque

23/01/2015 Bought goods from the following on credit: Choppies P3, 000, Superspar P5,000

25/01/2015 Sold goods by cheque P10, 000

26/01/ 2015 Bought a second hand car paying by cheque P8, 000

29/01/2015 Paid electricity P500, telephone P500, rent P2, 000 by cheque

30/01/2015 Bought stationary by cash P300

31/01/2015 Paid Choppies P2, 000, Superspar P3, 000 by cheque

31/01/2015 Sold goods by cheque P3, 000

Required

a. Do the double entry and balance off accounts for the above showing the following in your answer. (50 marks)

i. Show all the transactions that happen in the above scenario.

ii. Classify all accounts in the above scenario.

iii. Show the effect of each transaction.

iv. Show the double entry.

b. Draw up Masego Leero’s Trial balance (13 marks)

c. After drawing up the trial balance the following errors were discovered:

i. Credit Sales invoices to M Mothusi P3, 000, L Mokone P2, 500, M Moilwa P4, 000 were omitted from the books.

ii. P5, 000 cash banked was not recorded in the books

iii. A car bought for P10, 000 by cheque was mistakenly recorded in the books as P8, 000

iv. A purchase of furniture P500 was mistakenly recorded in the purchases account.

v. Interest Payable P300 was not recorded in the books.

d. Draw up a corrected trial balance (12marks)


Answers


Masego Leero Journal Enteries Date Particulars 1.1.2015 Cash a/c Dr. To Masego Leero, Capital (Capital invested) Debit in P C

Date Particulars 21.1.2015 Cash a/c Dr. Bank a/c Dr. To Accounts Receivable - Kago M To Accounts Receivable - Lorato To Accou

Debit in P Credit in P 3000 Correction Enteries Date Particulars 31.1.2015 Accounts Receivable -M Mothusi a/c Accounts Receiv

Trial Balance For the period ending 31.1.2015 Corrections Corrected Debit in P Credit in P Debit in P Credit in P Debit in P

.

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