SOURCE DOCUMENTS AND BOOKS OF ORIGINAL ENTRY

1. Salary account
Salaries 200 000 Accrued (open) 46 000
Prepaid (close) 150 000
Profit loss 104 000
200 000 200 000

2 - The property or life being insured must be the subject matter of the insurance
agreement
- There must be some property or life that is capable of being insured
- The relationship between the insured and the property or life must be
recognized
- The insured must stand in relationship with the property or life being insured

3. Commission received account

Kshs Kshs
Profit and loss Balance b/d
48000 12000
Balance c/d Cash book
24000 60000

72000 72000
Balance b/d
24000
4. - Sales journal
- Sales returns/ Returns inwards journal
- Purchases returns/ returns outwards journal
- Cash book/ cash receipts and cash payments journal
- Purchases journal
 - General/ journal proper

5.
Dr. Debtors control a/c Cr.
Bal b/d 11,000 Bad debts W/O 5000
Dishonoured cheques 2,800 Returns inwards 1600
Credit sales 52,500 Receipts 31,000
Discount allowed 3,400
Bal c/d 25,300
66,300
66,300

27. FINANCIAL STATEMENTS

1. Margin = G.P = Sales – Cost
*
Sales Sales
20 S = S – (160,000 + 1800,000- 200,000)
100 S- 1q,1760,000
80 S = 1,1760,000
100
S = 17600X 100
80

2. The following balances were r extracted from the books of Masai retailers
on 14th July 2000
Prepare the trading account for the period ended 14th July 2000

Masai net trading account for the year ended 14th July 2000

Opening stock 30 000 Sales 1 000

000
Purchases 800 (Less) return inwards 20
 000 000
(less) return 15 785 Net sales 980
000 000 000
G.A.S 815
000
Closing stock 80
000
C.O.S 735
000
Gross profit 245
000
980 980
000 000

Mark up=GP/COS X100=20

1
/5-1= ¼ x25=GP/980 000
=25X980 000/100
=Sh.245 000

3. Margin;
G.P X 100
Net sales
90,000 x 100=33 1/3
270,000
R.O.S.T. = Cost of goods sold
Average stock
= 180000
115,000
=1.6 times

4. Average stock 120,000

ROSTO = 3times
(a) From ROSTO = cost of sales = COS
Average stock 120,000
3 = COS
120,000
 \COS = 120,000 x 3 = 360,000

(b) From margin, Mark up = 1 = 1

4–1 3
1 = GP
3 COS
1 = GP = 3GP = 360,000
3 360,000
GP = 120,000
\Gross Profit = Shs. 120,000

(c) From margin = ¼ = GP

sales
Sales = 4 x 120,000
Sales = 480,000

5. Bondo traders
Trading account
For the year ended 31 Dec 2004

Opening 2 000 Sales 56 400

Purchases 46 000
48 500
Less closing stock 1
500
49 000
G P c/d 9 400 56 400
56 400
6. - External
borrowing e.g. from IMF and World Bank
- Solicit for foreign grants/donations/aids from donor countries
- Reduce government expenditure through cost-cutting measures
- Sale and lease back of public assets
- Introducing new taxation of selected goods

7.

Half Bilha Traders

Profit and loss Account
For the month ended 30th Sep, 2009
 Cost of sales Net sales 300000
150000
Gross profit c/d 300000
50000 Gross profit b/d 150000

300000 Discount received 6000

Expenses
Carriage outwards
12000 156000
Bad debts Net profit 74000
30000
Wages
25000
Rent
15000
Net profit
74000

156,000

8. (a) Gross profit

Mark up = G.P = 2
cost of sales 3
Margin = 2/2+ 3 = 2/5
h.p = 2/5 x 5,400,000 = 2,160,000

(b) Cost of sale = sales – G.P

5,400,000 – 2,160,000 = 3,240,000
P

(c) Net profit = G.P – Expenses

= 2,160,000 – 800,000 = 1,360,000

9. The following information relates to Mandu enterprises limited

Stock (1.1.2009) 40000
Stock (31.1.2009) 60000
Purchases 500000
Margin 20%
 Prepare Mandu Enterprises Limited Trading account for the year ended 31st
December, 2009

MANDU ENTERPRISES LIMITED

TRADING AND ACCOUNT
For the period ended 31st Dec, 2009

Dr Cr
Shs.
Shs Sales 600000
Opening stock 40000
Add purchases 500000
COGAS 540000
Less closing stock 60000
COGS 480000
Gross profit 20000 600000
600000

Margin to mark up
20% or 1/5 = 1/5-1 = ¼

\ Gross profit = ¼ x 480000 = 120,000

10. a) Working capital

= current assets – current liabilities

= 320000 – 99000 = 221000

b) Return on capital

= NP x 100
Capital invested
= 95000/525000 x 100 = 18.09%

11. Mark- up = G.P x100

Cos
10%=G.P X100
 96,000
GP=9,600
Sales=Cost +G.P = 96,000+9600=105,600

Atis
Trading and loss account
For the month ending 30-6-2008
Opening stock 22,000 Sales 105,600
Add purchases 100,000
Co GAS 122,000
Less c.s 26,000
Cos 96,000
G.P c/d 9,600
105,600 105,600
BAL b/d 9,600

12. SHAH TRADERS

Trading account for the period trading 30th June
2010
Opening stock Sales
65000 280000
Add purchases Less sales returns
190000 (4200)
Less purchases returns (10000)
180000 275800
Goods available for sale
245000
Less closing stock
70000
Cost of sales
175000
Gross profit c/d
100800
275800 275800
Gross profit b/d
100800
13.
Chombo wholesalers
Trading A/C for the year
Ending 31st Dec, 2009

Opening stock Sales 500000

80000
Add purchases
320000
Goods available for sale
400000
Less closing stock
40000 500000
Cost of sales Gross profit b/d 140000
360000
Gross profit c/d
140000

500000

a) Margin = G.P X 100

sales
= 140000 X 100
500000
=28%

b) Current ratio = Current assets : current liabilities

Current asset = 40000 + 140000 = 180000
Current liabilities = 90000
180000 : 90000
2:1
 c) Rate of stock turnover = cost of sale Average stock
= 80000 + 40000
Average stock
2
= 360000
= 60000
60000
= 6 times

14. i) Sales for the year

Mark up = GP X 100
COGS
25 = 100,000 x 100
COGS
COGS = 100,000 X 100
25
COGS = kshs. 400,000
But sales = COGS + GP
= 400,000 + 100,000 = kshs. 500,000

ii) Rate of stock turn over

Rates of stock turn over COGS

Av
Average stock = opening stock + closing stock
2
Closing stock = purchases + opening stock -COGS
= 400,000 + 40,000 – 400,000
= Kshs. 40,000

SOURCE DOCUMENTS AND BOOKS OF ORIGINAL ENTRY

1. the general journal
Date Particulars Folios Dr(sh) Cr (sh)
2009 June Furniture A/C G.L 50,000
Motor vehicle G.L 100,000
(A record of opening balance of assets)
2009 June 2 Furniture A/C G.L 65,000
Mwema furniture Ltd G.L 65,000
(Being a record of office furniture bought on credit
from Mwema furniture Ltd)
2009 June 10 Omwami garage A/C G.L 200,000 200,000
 C Motor vehicle A/C G.L
(being a record of credit sale of motor vehicle to
Omwami garage)
2009 June 25 Motor vehicle A/C G.L 750,000
Purchases 750,000
(Being a correction of an error of principle)
2009 June 28 Classic academy A/C G.L 15,000 15,000
Computer office
Equipment A/C
(Being a record of the computer to classic academy)
2009 June 29 Goseta farm A/C G.L 250,000
Tractor A/C 200,000
Train on disposal of old tractor 50,000
(Being a record of old tractor to Goseta farms at a
profit)

2.
TOTAL DEBTORS ACCOUNT
DR
CR
Balance b/d Bad debts
24000 2000
Discount disallowed Discounts allowed
1000 18000
Dishonored cheque Returns inwards
36000 5600
Credit sales Cash
334600 298000
Bal c/d
395600 72000
Balance b/d
72000 395600
Total sales = cash sales + credit sale
= 700000 + 334600 =
Shs.1,034,600
 3.

TOTAL CREDITORS ACCOUNT

DR
CR
Returns outwards Balance c/d
10200 68000
Cash Credit purchases
590000 621800
Discounts received
6000
Balance c/d 689800
83600 Balance b/d
83600
689800

Total purchases = cash purchases + credit purchases

=483400 + 621800= Shs.1,105,200
4.
Cash receipt journal
Date particulars Receipt Ledger Discount cash Bank
2009 number folio allowed
June 2 sales 063 50 000
P P
6 Kemunto 064 P
3 200 76 800
P
18 Bank C 30 000 P
P
21 Manwori 065 660 16 500
30 Sales 066
P P 150 000 P
3860 96 500 226 800

5. Cash payment journal

Date particulars Receipt Ledges Discount cash bank
2009 number folio received
P
June 3 Salary 083 101 500
P
12 &wages 0656 800 P 39
P
18 Omwabo C 200 30 000
22 Cash 734 85 000 P
23 Furniture 801
26 Wages P P
24
drawings 000 216 500
800
5
P
000
68
200

6. JAO TRADERS
TRADING AND PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDING 31/12/2008
DR
CR
Opening stock Sales
60000 208000
Add purchases 161000 Less returns in
Add carriage 11000 27000
172000
Less returns out (25000)
147000 181,000
G.A.F.S
207000
Less closing stock
(72000)
Cost of sales
135000
Gross profit c/d
46000 181000
181000
Gross profit
Expenses 46000
Discount allowed Discount rec
2000 8000
Salaries Net loss c/d
20000 800
Tel charges 5000
Less prepaid 1000
4000
Water bills 2100
Add accrued 1300
3300
Electricity expenses
2000
Carriage out 54800
10000
Insurance paid 1000
Dep on equil (10/100 x 125000) 12500

54800

Net loss b/d

800

7. During the month of March 2010 the petty cashier of Nyangija distributors
made the following payment after receiving an imprest of shs12, 000 from the
general cashier.
Receipts Date Details Total Travel Office Staff Stationery Postage Sundry L
Exp Tea a
12,000 March 1 Cash
3 Traveling 3500 3500
6 Office exp 1000 1000
8 Postage 1200 1200
15 Staff tea 800 800
19 Stationery 2000
2000
22 Office exp 800
800
24 Staff tea 1000
1000
26 Sundry exp 700
31 Benson 700
900
9
11,900 3500 1800 1800 2000 1200 700 9
March Bal c/d 100
31
12,000 12,000
100 Bal b/d

8. PURCHASES JOURNAL
Date Details Invoice No. Ledger folio August
2005 Obwocha 1200
March 1 Agwata 3000
“ “ Nyanamba 2500
1 Onyancha 2700
“ “ Obwocha 6600
1 Ombaki 3300
“ “ 19300
 10
“ “
10
“ “
10
SALES JOURNAL
Date Details Invoice No. Ledger folio August
2005 Okero 2000
March 5 Micheka 4300
“ “ Omwega 1500
5 Bundi 850
“ “ Tendu 630
5 Okero 900
“ “ 10180

PURCHASE RETURNS JOURNAL

Date Details Invoice No. Ledger folio August
2005 March 20 Obwocha 250
“ “ 20 Onyancha 700
950
SALES RETURNS JOURNAL
Date Details Invoice No. Ledger folio August
2005 Bundi 150
March 30 Michieka 130
“ “ 280
30

SOURCE DOCUMENTS AND BOOKS OF ORIGINAL ENTRY

1. Salary account
Salaries 200 000 Accrued (open) 46 000
Prepaid (close) 150 000
Profit loss 104 000
 200 000 200 000

2 - The property or life being insured must be the subject matter of the insurance
agreement
- There must be some property or life that is capable of being insured
- The relationship between the insured and the property or life must be
recognized
- The insured must stand in relationship with the property or life being insured

3. Commission received account

Kshs Kshs
Profit and loss Balance b/d
48000 12000
Balance c/d Cash book
24000 60000

72000 72000
Balance b/d
24000
4. - Sales journal
- Sales returns/ Returns inwards journal
- Purchases returns/ returns outwards journal
- Cash book/ cash receipts and cash payments journal
- Purchases journal
- General/ journal proper

5.
Dr. Debtors control a/c Cr.
Bal b/d 11,000 Bad debts W/O 5000
 Dishonoured cheques 2,800 Returns inwards 1600
Credit sales 52,500 Receipts 31,000
Discount allowed 3,400
Bal c/d 25,300
66,300
66,300

27. FINANCIAL STATEMENTS

1. Margin = G.P = Sales – Cost
*
Sales Sales
20 S = S – (160,000 + 1800,000- 200,000)
100 S- 1q,1760,000
80 S = 1,1760,000
100
S = 17600X 100
80

2. The following balances were r extracted from the books of Masai retailers
on 14th July 2000
Prepare the trading account for the period ended 14th July 2000

Masai net trading account for the year ended 14th July 2000

Opening stock 30 000 Sales 1 000

000
Purchases 800 (Less) return inwards 20
000 000
(less) return 15 785 Net sales 980
000 000 000
G.A.S 815
000
 Closing stock 80
000
C.O.S 735
000
Gross profit 245
000
980 980
000 000

Mark up=GP/COS X100=20

1
/5-1= ¼ x25=GP/980 000
=25X980 000/100
=Sh.245 000

3. Margin;
G.P X 100
Net sales
90,000 x 100=33 1/3
270,000
R.O.S.T. = Cost of goods sold
Average stock
= 180000
115,000
=1.6 times

4. Average stock 120,000

ROSTO = 3times
(a) From ROSTO = cost of sales = COS
Average stock 120,000
3 = COS
120,000
\COS = 120,000 x 3 = 360,000

(b) From margin, Mark up = 1 = 1

4–1 3
1 = GP
3 COS
1 = GP = 3GP = 360,000
 3 360,000
GP = 120,000
\Gross Profit = Shs. 120,000

(c) From margin = ¼ = GP

sales
Sales = 4 x 120,000
Sales = 480,000

5. Bondo traders
Trading account
For the year ended 31 Dec 2004

Opening 2 000 Sales 56 400

Purchases 46 000
48 500
Less closing stock 1
500
49 000
G P c/d 9 400 56 400
56 400
6. - External
borrowing e.g. from IMF and World Bank
- Solicit for foreign grants/donations/aids from donor countries
- Reduce government expenditure through cost-cutting measures
- Sale and lease back of public assets
- Introducing new taxation of selected goods

7.

Half Bilha Traders

Profit and loss Account
For the month ended 30th Sep, 2009
Cost of sales Net sales 300000
150000
Gross profit c/d 300000
50000 Gross profit b/d 150000

300000 Discount received 6000

Expenses
 Carriage outwards
12000 156000
Bad debts Net profit 74000
30000
Wages
25000
Rent
15000
Net profit
74000

156,000

8. (a) Gross profit

Mark up = G.P = 2
cost of sales 3
Margin = 2/2+ 3 = 2/5
h.p = 2/5 x 5,400,000 = 2,160,000

(b) Cost of sale = sales – G.P

5,400,000 – 2,160,000 = 3,240,000
P

(c) Net profit = G.P – Expenses

= 2,160,000 – 800,000 = 1,360,000

9. The following information relates to Mandu enterprises limited

Stock (1.1.2009) 40000
Stock (31.1.2009) 60000
Purchases 500000
Margin 20%
Prepare Mandu Enterprises Limited Trading account for the year ended 31st
December, 2009

MANDU ENTERPRISES LIMITED

TRADING AND ACCOUNT
For the period ended 31st Dec, 2009
 Dr Cr
Shs.
Shs Sales 600000
Opening stock 40000
Add purchases 500000
COGAS 540000
Less closing stock 60000
COGS 480000
Gross profit 20000 600000
600000

Margin to mark up
20% or 1/5 = 1/5-1 = ¼

\ Gross profit = ¼ x 480000 = 120,000

10. a) Working capital

= current assets – current liabilities

= 320000 – 99000 = 221000

b) Return on capital

= NP x 100
Capital invested
= 95000/525000 x 100 = 18.09%

11. Mark- up = G.P x100

Cos
10%=G.P X100
96,000
GP=9,600
Sales=Cost +G.P = 96,000+9600=105,600

Atis
Trading and loss account
For the month ending 30-6-2008
 Opening stock 22,000 Sales 105,600
Add purchases 100,000
Co GAS 122,000
Less c.s 26,000
Cos 96,000
G.P c/d 9,600
105,600 105,600
BAL b/d 9,600

12. SHAH TRADERS

Trading account for the period trading 30th June
2010
Opening stock Sales
65000 280000
Add purchases Less sales returns
190000 (4200)
Less purchases returns (10000)
180000 275800
Goods available for sale
245000
Less closing stock
70000
Cost of sales
175000
Gross profit c/d
100800

275800 275800
Gross profit b/d
100800
13.
Chombo wholesalers
Trading A/C for the year
Ending 31st Dec, 2009

Opening stock Sales 500000

80000
Add purchases
320000
Goods available for sale
400000
Less closing stock
40000 500000
Cost of sales Gross profit b/d 140000
360000
Gross profit c/d
140000

500000

a) Margin = G.P X 100

sales
= 140000 X 100
500000
=28%

b) Current ratio = Current assets : current liabilities

Current asset = 40000 + 140000 = 180000
Current liabilities = 90000
180000 : 90000
2:1
 c) Rate of stock turnover = cost of sale Average stock
= 80000 + 40000
Average stock
2
= 360000
= 60000
60000
= 6 times

14. i) Sales for the year

Mark up = GP X 100
COGS
26 = 100,000 x 100
COGS
COGS = 100,000 X 100
25
COGS = kshs. 400,000
But sales = COGS + GP
= 400,000 + 100,000 = kshs. 500,000

ii) Rate of stock turn over

Rates of stock turn over COGS

Av
Average stock = opening stock + closing stock
2
Closing stock = purchases + opening stock -COGS
= 400,000 + 40,000 – 400,000
= Kshs. 40,000

SOURCE DOCUMENTS AND BOOKS OF ORIGINAL ENTRY

1. the general journal
Date Particulars Folios Dr(sh) Cr (sh)
2009 June Furniture A/C G.L 50,000
Motor vehicle G.L 100,000
(A record of opening balance of assets)
2009 June 2 Furniture A/C G.L 65,000
Mwema furniture Ltd G.L 65,000
(Being a record of office furniture bought on credit
from Mwema furniture Ltd)
2009 June 10 Omwami garage A/C G.L 200,000 200,000
 C Motor vehicle A/C G.L
(being a record of credit sale of motor vehicle to
Omwami garage)
2009 June 25 Motor vehicle A/C G.L 750,000
Purchases 750,000
(Being a correction of an error of principle)
2009 June 28 Classic academy A/C G.L 15,000 15,000
Computer office
Equipment A/C
(Being a record of the computer to classic academy)
2009 June 29 Goseta farm A/C G.L 250,000
Tractor A/C 200,000
Train on disposal of old tractor 50,000
(Being a record of old tractor to Goseta farms at a
profit)

2.
TOTAL DEBTORS ACCOUNT
DR
CR
Balance b/d Bad debts
24000 2000
Discount disallowed Discounts allowed
1000 18000
Dishonored cheque Returns inwards
36000 5600
Credit sales Cash
334600 298000
Bal c/d
395600 72000
Balance b/d
72000 395600
Total sales = cash sales + credit sale
= 700000 + 334600 =
Shs.1,034,600
 3.

TOTAL CREDITORS ACCOUNT

DR
CR
Returns outwards Balance c/d
10200 68000
Cash Credit purchases
590000 621800
Discounts received
6000
Balance c/d 689800
83600 Balance b/d
83600
689800

Total purchases = cash purchases + credit purchases

=483400 + 621800= Shs.1,105,200
4.
Cash receipt journal
Date particulars Receipt Ledger Discount cash Bank
2009 number folio allowed
June 2 sales 063 50 000
P P
6 Kemunto 064 P
3 200 76 800
P
18 Bank C 30 000 P
P
21 Manwori 065 660 16 500
30 Sales 066
P P 150 000 P
3860 96 500 226 800

5. Cash payment journal

Date particulars Receipt Ledges Discount cash bank
2009 number folio received
P
June 3 Salary 083 101 500
P
12 &wages 0656 800 P 39
P
18 Omwabo C 200 30 000
22 Cash 734 85 000 P
23 Furniture 801
26 Wages P P
24
drawings 000 216 500
800
5
P
000
68
200

6. JAO TRADERS
TRADING AND PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDING 31/12/2008
DR
CR
Opening stock Sales
60000 208000
Add purchases 161000 Less returns in
Add carriage 11000 27000
172000
Less returns out (25000)
147000 181,000
G.A.F.S
207000
Less closing stock
(72000)
Cost of sales
135000
Gross profit c/d
46000 181000
181000
Gross profit
Expenses 46000
Discount allowed Discount rec
2000 8000
Salaries Net loss c/d
20000 800
Tel charges 5000
Less prepaid 1000
4000
Water bills 2100
Add accrued 1300
3300
Electricity expenses
2000
Carriage out 54800
10000
Insurance paid 1000
Dep on equil (10/100 x 125000) 12500

54800

Net loss b/d

800

7. During the month of March 2010 the petty cashier of Nyangija distributors
made the following payment after receiving an imprest of shs12, 000 from the
general cashier.
Receipts Date Details Total Travel Office Staff Stationery Postage Sundry L
Exp Tea a
12,000 March 1 Cash
3 Traveling 3500 3500
6 Office exp 1000 1000
8 Postage 1200 1200
15 Staff tea 800 800
19 Stationery 2000
2000
22 Office exp 800
800
24 Staff tea 1000
1000
26 Sundry exp 700
31 Benson 700
900
9
11,900 3500 1800 1800 2000 1200 700 9
March Bal c/d 100
31
12,000 12,000
100 Bal b/d

8. PURCHASES JOURNAL
Date Details Invoice No. Ledger folio August
2005 Obwocha 1200
March 1 Agwata 3000
“ “ Nyanamba 2500
1 Onyancha 2700
“ “ Obwocha 6600
1 Ombaki 3300
“ “ 19300
 10
“ “
10
“ “
10
SALES JOURNAL
Date Details Invoice No. Ledger folio August
2005 Okero 2000
March 5 Micheka 4300
“ “ Omwega 1500
5 Bundi 850
“ “ Tendu 630
5 Okero 900
“ “ 10180

PURCHASE RETURNS JOURNAL

Date Details Invoice No. Ledger folio August
2005 March 20 Obwocha 250
“ “ 20 Onyancha 700
950
SALES RETURNS JOURNAL
Date Details Invoice No. Ledger folio August
2005 Bundi 150
March 30 Michieka 130
“ “ 280
30

26.- SOURCE DOCUMENTS AND BOOKS OF ORIGINAL ENTRY

The topic entails;
- Meaning of source documents; identify source documents and explain
how they are used in recording business transactions
- Meaning a book of original entry
- Discussing the various types of books of original entry
- The journal as the main book of original entry and how to record
information from source documents into relevant journals.
 - Posting information from the journals to relevant accounts.

1. The following data was extracted from the books of Mwauri Traders:

31-12-2002 31-12-2003
Shs. Shs.
Salaries accrued 46 000
Salaries prepaid 150 000
For the year ended 31-12-2003, salaries paid amounted to sh.200 000.
Prepare the salaries account as at 31st Dec. 2003

2. State four conditions necessary for the operation of the principle of indemnity
in
Insurance

3. On 31st December,2009 details extracted from Khetia’s Ltd. showed

commission received for the
year as Kshs. 60,000. Commission received in advance by 1st January,2009
was Kshs.12,000. Whereas commission received in advance as at 31st
December, 2009 was Kshs. 24,000. Determine the commission income for
the year 2009 that is posted to the profit and loss account
4. State the journal that deals with each of the following types of transactions

TYPE OF TRANSACTION JOURNAL

i) Credit sales
ii) Return of goods by customers
iii) Return of goods to suppliers
iv) Cash cheques received
v) Credit purchases
vi) Sale of fixed assets on credit
vii) Purchase of a motor van on credit from general motors
viii) Correction of errors
5. From the following information prepare debtors control account for the year
ended 31st Dec 2007
Shs
Debtors balance 1-1-07 11,000
Credit sales ?
Bad debts written off 5,000
Return inwards 1,600
Receipts from debtors 31,000
 Dishonoured cheque 2,800
Discount allowed 3,400
Debtors balance 31-12-07 25,300

26. SOURCE DOCUMENTS AND BOOKS OF ORIGINAL ENTRY

1. Journalize the following transactions which took place in the business of W.
Wanjala during
the month of June 2009:-
June 1 Balance B/f from May 2009 were:-
Office furniture shs.50,000 and motor vehicle
shs.100,000
June 2 Purchased office furniture on credit for shs.65,000 from
Mwema furniture
June 10 Sold an old vehicle on credit to Omwami garage for
shs.200,000
June 25. Discovered that a motor vehicle that had been bought
on credit from Kanyere motor for Kshs.750,000, had
been recorded in purchases account
June 28 Sold an old computer to classic academy on credit for
ksh. 15,000
June 29 : Sold an old tractor whose book value is Kshs. 200,000
for Khs.250,000
to Goseta

2. Mr. Osodo, a sole trader in Mumias town does not keep complete set of
accounting
books. However, the following information was obtained from his general
operation book for
the year ending 31/12/209
Shs.
Debtors balance on 1/1/2009 24000
Bad debts 2000
Creditors balance 1/1/2009 68000
Debtors balance on 31/12/2009 72000
 Discount allowed 18000
Creditors balance on 31/12/2009 83600
Returns inwards 5600
Cash paid to creditors 590000
Returns outwards 10200
Cash received from debtors 298000
Discount disallowed 1000
Dishonored cheques 36000
Discount received 6000
Additional information
He also disclosed that he had paid cash purchases amounting to Shs.483400
and received cash sales of Shs.70000 for the year
Required; i) Prepare total debtors account and total creditors account

ii) Calculate total purchases and total sales for the year

3. On 1st June 2009, Nyamira Traders had cash in hand shs.87,000 and cash at bank
Shs.250,000.
During the month, the following transactions took place:-
2009 June 2:-Cash sales shs.50,000 issued Receipt No.063
3:- Paid salaries and wages shs.101,500 by cheque ; cheque no. 083
6:- Received a cheque for shs.76,800 from Kemunto, after allowing
her a cash discount
of 4% issued a receipt No. 064
12:- Settled Omwabo’s account of shs.40,000 in cash, having
deducted shs.800 cash
discount. Received recipt no. 0656
18:- Withdrew shs.30,000 from bank for office use
21:- Received shs.16,500 cash from Manwari in settlement of his
account less shs.660
cash discount. Receipt No. 065
22: - Bought office furniture by cheque shs.85,000. Receipt No. 734
23:- Paid wages Shs.24,000 in cash receipt No. 801
 28:- Withdrew shs.5000 cash for private use
30:- Received a cheque for shs.150,000 in respect of cash sales .
Receipt No. 066
Required: Prepare:- (i) A cash receipts journal

(ii) A cash payment journal

4. The following is a trial balance of JAO traders as at 31/12/2009

Dr Cr
(Shs) (Shs)
Capital 170000
Opening stock 60000
Equipment at cost 125000
Purchases 161000
Sales 208000
Discounts 2000 8000
Returns 27000 25000
Salaries 20000
Telephone charges 5000
Water bills 2100
Creditors 15100
Debtors 21000
Electricity expenses 2000
Insurance paid 1000
426000 426000
Additional information
i. Closing stock was valued at Shs.72000
ii. Telephone charges prepaid was Shs.1000 and outstanding water bills
was Shs.1300
iii. Depreciation on equipment is 10% p.a on cost
iv. Carriage inwards was Shs.11000 and carriage outwards Shs.10000
Prepare trading and profit loss account for the year ending 31/12/2009

5. During the month of March 2010 the petty cashier of Nyangija distributors
made the following payment after receiving an imprest of shs12, 000 from the
general cashier.

March 3 traveling 3500

 March 6 office expenses 1000
March 8 postage 1200
March 15 staff tea 800
March 19 stationery 2000
March 22 office expenses 800
March 24 staff tea 1000
March 26 sundry expenses 700
March 31 F. Benson a creditor 900

Required: Using the analytical columns below prepare a petty cash book of
Nyangija distributors
o Traveling
o Office expenses
o Postage
o Stationery
o Staff tea
o Sundry expenses
o Ledger accounts

6. The following extracted from the books of Mogusii Ltd. 2005

March 1. Credit purchases from Obwocha Sit 1200
Agwata sh. 3,000 and Nyauamba sh.2,500
March 5 Credit sales to Okero Sit 2,000, Michieka sh.4,300 and
Omwenga sh. 1500
March 10 Credit purchases from Onyancha Sh.2700
Obwocha sh 6600 and Ombaki sh.3300
“ 20 Returned goods to Obwocha sh.250 and Onyancha 703
26 Credit sales to Bundi sh.850. Tendu sh.630 and Okero-sh.900
“ 30 GoodswereretumedbyBundish.I50andMichiekasitl30
Required: Enter the above transactions in their relevant day books