16.

3 You are to enter up the sales, purchases, returns inwards and returns outwards day books
from the following details, then to post the items to the relevant accounts in the sales and
purchase ledgers. The total of the day books are then to be transferred to the accounts in the
General Ledger.

20X9 Assets: Motor vehicles Ksh 3,700,000, Fixtures Ksh 180,000, Stock Ksh 420,000,

Debtors – L Roda Ksh 95,000, K Mohammed Ksh 45,000, H Charo Ksh 64,000

Bank Ksh 286,000, Cash Ksh 65,000.

Liabilities: Creditors – P Paulo Ksh 129,000, B Syombua Ksh 41,000.

May 1 Credit sales: T Thomas Ksh 56,000; L Roda Ksh 148,000; K Busolo Ksh 145,000.

‘‘ 2 The following paid us by cheque, in each case deducting a 5 per cent cash discount:

L Roda Ksh 95,000; T Thomas Ksh 56,000; K Busolo Ksh 145,000.

‘‘ 3 Credit purchases: P Paulo Ksh 144,000; H Wako Ksh 25,000; B Syombua Ksh 76,000.

‘‘ 4 Paid rent by cheque Ksh 43,000.

‘‘ 5 Cash sales paid direct into the bank Ksh 74,000

‘‘ 6 Kay Bank lent us Ksh 500,000 paying by cheque.

‘‘ 7 Credit sales: K Kamau Ksh 89,000; N Mailu Ksh 78,000; N Langat Ksh 257,000.

‘‘ 8 We paid the following accounts by cheque in each case deducting a 21/2 per cent cash
discount: P Paulo Ksh 129,000; H Wako Ksh 25,000; B Syombua Ksh 41,000.

‘‘ 9 Credit purchases: B Bett Ksh 24,000; H Wako Ksh 58,000; H Ksh 123,000

. ‘’ 10 Credit sales: T Thomas Ksh 65,000; K Busolo Ksh 154,000.

‘‘ 11 Goods returned by us to: P Paulo Ksh 12,000; B Syombua Ksh 22,000.

‘‘ 12 Paid motor expenses in cash Ksh 8,100.

‘‘ 13 Withdrew cash from the bank for business use Ksh 40,000.
‘‘ 14 Goods returned to us by: T Thomas Ksh 5,000; K Busolo Ksh 11,000; K Kamau Ksh
13,000.

‘‘ 15 Paid wages in cash Ksh 58,000

‘‘ 16 Bought fixtures by cheque Ksh 43,200.

‘‘ 17 Credit purchases: H Wako Ksh 54,000; B Bett Ksh 65,000; L Namu Ksh 75,000

‘’ 17 Bought furniture on credit from Timesales Ltd Ksh 56,100

‘’ 18 Bought machinery for Ksh 126,000 on credit from Electro Ltd.

‘’ 19 K Mohammed owed us Ksh 45,000. He is declared bankrupt and we received Ksh

‘‘ 20 Goods returned by us to B Syombua Ksh 14,000.

‘’ 21 Furniture bought by us for Ksh 6,100 was returned to the supplier Timesales Ltd as it
was unsuitable.

‘’ 22 Some time ago we paid an insurance bill thinking that it was all in respect of the
business. We now discover that Ksh 6,200 of the amount paid was in fact insurance of
our private house.

‘’ 23 Took goods costing Ksh 34,000 out of the business stock for own use.

‘‘ 24 Credit sales: N Mailu Ksh 57,000; K Kamau Ksh 65,000; O Ouma Ksh 112,000.

‘’ 25 Banked Ksh 50,000 from cash till.

‘’ 26 H Charo owes us Ksh 64,000. He is unable to pay his debt. We agree to take some
computer equipment from him at that value and so cancel the debt.

‘‘ 28 Goods returned to us by N Mailu Ksh 24,000.

‘‘ 31 Credit sales: N Langat Ksh 55,000.

16.4A You are to enter the following items in the books, post to personal accounts, and show
the transfers to the General Ledger.

20X9

July 1 Credit purchases from: K ‘Hinga Ksh380; M Nyaga Ksh500; SilaKsh106.

‘‘ 3 Credit sales to: E Ruto Ksh510; E Mutune Ksh246; F Thomas Ksh356.

‘‘ 5 Credit purchases from: R Keter Ksh200; J Mpishi Ksh180; D Mbindyo Ksh410; C

‘‘ 8 Credit sales to: A Gado Ksh307; H Mutuvi Ksh250; J Furaha Ksh185.

‘‘ 12 Returns outwards to: M Nyaga Ksh30; SilaKsh16.

‘‘ 14 Returns inwards from: E Mutune Ksh18; F Thomas Ksh22.

‘‘ 20 Credit sales to: E Mutune Ksh188; F Pema Ksh310; E Langat Ksh420.

‘‘ 24 Credit purchases from: C Furaha Ksh550; K Emilio Ksh900.

‘‘ 31 Returns inwards from: E Mutune Ksh27; E Ruto Ksh30.

‘‘ 31 Returns outwards to: J Mpishi Ksh13; C Daudi Ksh11.

J Brew, after being in business for some years without keeping proper records, now decides to

keep a double entry set of books. On 1 July 20X8 he establishes that his assets and liabilities are

as follows:

Assets: Motor vehicles Ksh 3,700,000, Fixtures Ksh 1,800,000, Stock Ksh 420,000,

Debtors – B Yombu Ksh 95,000, D Mbeke Ksh 45,000,

Bank Ksh 286,000, Cash Ksh 65,000.

Liabilities: Creditors – M Quinn Ksh 129,000, C Walters Ksh 41,000.

17.1 You are to show the journal entries necessary to record the following items:
(a) 20X8 May 1 Bought a van on credit from Dee Garage for Ksh5,395,000.

(b) 20X8 May 3 A debt of Ksh 81,00 owing from P Kingi was written off as a bad debt.

(c) 20X8 May 8 Office furniture bought by us for Ksh610 was returned to the supplier Timewas
Ltd,as it was unsuitable. Full allowance will be given to us.

(d) 20X8 May 12 We are owed Ksh320 by R Twig. He is declared bankrupt and we received
Ksh51 in full settlement of the debt.

(e) 20X8 May 14 We take goods costing Ksh22 out of the business stock without paying for
them.

(f) 20X8 May 28 Some time ago we paid an insurance bill thinking that it was all in respect of
the

business. We now discover that Ksh62 of the amount paid was in fact insurance of our private

house.

(g) 20X8 May 28 Bought machinery for Ksh1,260 on credit from Electrotime Ltd.

17.2A Show the journal entries necessary to record the following items:

20X7

Apr 1 Bought fixtures on credit from Bell and Co Ksh1,153.

‘‘ 4 We take goods costing Ksh340 out of the business stock without paying for them.

‘‘ 9 Ksh68 of the goods taken by us on 4 April is returned back into stock by us. We do not

take any money for the return of the goods.

‘‘ 12 H Cowes owes us Ksh640. He is unable to pay his debt. We agree to take some
computer

equipment from him at that value and so cancel the debt.

‘‘ 18 Some of the fixtures bought from Bell and Co, Ksh42 worth, are found to be
unsuitable
and are returned to them for full allowance.

‘‘ 24 A debt owing to us by P Langats of Ksh124 is written off as a bad debt.

‘‘ 30 Office equipment bought on credit from Furniture Today Ltd for Ksh1,710.

14.3 F Benjamin of 10 Lower Street, Plymouth, is selling the following items at the
recommended retail prices as shown: white tape Ksh10 per roll, green felt at Ksh4 per metre,
blue cotton at

Ksh6 per sheet, black silk at Ksh20 per dress length. He makes the following sales:

20X7

May 1 To F Gray, 3 Keswick Road, Portsmouth: 3 rolls white tape, 5 sheets blue cotton, 1
dress

Flength black silk. Less 25 per cent trade discount.

‘‘ 4 To A Gray, 1 Shilton Road, Preston: 6 rolls white tape, 30 metres green felt. Less 331/3
per cent trade discount.

‘‘ 8 To E Hines, 1 High Road, Malton: 1 dress length black silk. No trade discount.

‘‘ 20 To M Allen, 1 Knott Road, Southport: 10 rolls white tape, 6 sheets blue cotton, 3 dress

lengths black silk, 11 metres green felt. Less 25 per cent trade discount.

‘‘ 31 To B Cooper, 1 Tops Lane, St Andrews: 12 rolls white tape, 14 sheets blue cotton, 9

metres green felt. Less 331/3 per cent trade discount.

You are to (a) draw up a sales invoice for each of the above sales, (b) enter them up in the Sales

Day Book and post to the personal accounts, and (c) transfer the total to the sales account in the

General Ledger.

14.4A J Fisher, White House, Bolton, is selling the following items at the retail prices as shown:
plastic tubing at Ksh1 per metre, polythene sheeting at Ksh2 per length, vinyl padding at Ksh5
per box, foam rubber at Ksh3 per sheet. She makes the following sales:

20X9

June 1 To A Portsmouth, 5 Rockley Road, Worthing: 22 metres plastic tubing, 6 sheets foam

rubber, 4 boxes vinyl padding. Less 25 per cent trade discount.

‘‘ 5 To B Butler, 1 Wembley Road, Colwyn Bay: 50 lengths polythene sheeting, 8 boxes vinyl

padding, 20 sheets foam rubber. Less 20 per cent trade discount.

‘‘ 11 To A Gate, 1 Bristol Road, Hastings: 4 metres plastic tubing, 33 lengths of polythene

sheeting, 30 sheets foam rubber. Less 25 per cent trade discount.

‘‘ 21 To L Mackeson, 5 Maine Road, Bath: 29 metres plastic tubing. No trade discount is

given.

‘‘ 30 To M Alison, Daley Road, Box ‘Hinga: 32 metres plastic tubing, 24 lengths polythene
sheeting, 20 boxes vinyl padding. Less 331

/3 per cent trade discount.

Required:

(a) Draw up a sales invoice for each of the above sales.

(b) Enter them up in the Sales Day Book and post to the personal accounts.

(c) Transfer the total to the sales account in the General Ledger

13.3 A three-column cash book for a wine wholesaler is to be written up from the following

details, balanced off, and the relevant discount accounts in the general ledger shown.

20X8
Mar 1 Balances brought forward: Cash Ksh620; Bank Ksh7,142.

‘‘ 2 The following paid their accounts by cheque, in each case deducting 5 per cent cash

discounts: G Slick Ksh260; P Fish Ksh320; T Old Ksh420 (all amounts are pre-discount).

‘‘ 4 Paid rent by cheque Ksh430.

‘‘ 6 F Black lent us Ksh5,000 paying by cheque.

‘‘ 8 We paid the following accounts by cheque in each case deducting a 21/2 per cent cash

discount: R White Ksh720; G Green Ksh960; L Flip Ksh1,600 (all amounts are pre-
discount).

‘‘ 10 Paid motor expenses in cash Ksh81.

Mar 12 J Pie pays his account of Ksh90, by cheque Ksh88, deducting Ksh2 cash discount.

‘‘ 15 Paid wages in cash Ksh580.

‘‘ 18 The following paid their accounts by cheque, in each case deducting 5 per cent cash

discount: A Pony Ksh540; B Line & Son Ksh700; T Owen Ksh520 (all amounts are pre-
discount).

‘‘ 21 Cash withdrawn from the bank Ksh400 for business use.

‘‘ 24 Cash Drawings Ksh200.

‘‘ 25 Paid W Peat his account of Ksh160, by cash Ksh155, having deducted Ksh5 cash
discount.

‘‘ 29 Bought fixtures paying by cheque Ksh720.

‘‘ 3 1 Received commission by cheque Ksh120.

13.4A Enter the following in the three-column cash book of an office supply shop. Balance off

the cash book at the end of the month and show the discount accounts in the general ledger.
20X8

June 1 Balances brought forward: Cash Ksh420; Bank Ksh4,940.

‘‘ 2 The following paid us by cheque, in each case deducting a 5 per cent cash discount:

S Braga Ksh820; L Pine Ksh320; G Hodd Ksh440; M Rae Ksh1,040.

‘‘ 3 Cash sales paid direct into the bank Ksh740.

‘‘ 5 Paid rent by cash Ksh340.

‘‘ 6 We paid the following accounts by cheque, in each case deducting 21/2 per cent cash
discount: M Peters Ksh360; G Graham Ksh960; F Bell Ksh400.

‘‘ 8 Withdrew cash from the bank for business use Ksh400.

‘‘ 10 Cash sales Ksh1,260.

‘‘ 12 B Age paid us their account of Ksh280 by cheque less Ksh4 cash discount.

‘‘ 14 Paid wages by cash Ksh540.

‘‘ 16 We paid the following accounts by cheque: R Todd Ksh310 less cash discount Ksh15; F
Dury

Ksh412 less cash discount Ksh12.

‘‘ 20 Bought fixtures by cheque Ksh4,320.

‘‘ 24 Bought lorry paying by cheque Ksh14,300.

‘‘ 29 Received Ksh324 cheque from A Line.

‘‘ 30 Cash sales Ksh980.

‘‘ 30 Bought stationery paying by cash Ksh56.

13.5 On 1 September, V Duckworth, a bar manager and entrepreneur, has the following financial
position relating to her activities as a corporate function organizer:

Ksh
Balance at Bank 1,000

Debtors – M Baldwin 2,500

– A Roberts 900

– G Platt 250

Stock 750

Creditors – Newton and Ridley 4,500

– J Duckworth 125

During September the following events occur:

1 M Baldwin settles his account after taking a cash discount of 20%.

2 A Roberts is declared bankrupt and no payments are anticipated in respect of the debt.

3 G Platt pays in full.

4 All creditors are paid. Newton and Ridley had indicated that, because of the speed of payment,

a 10% quick settlement discount may be deducted from the payment.

Required:

(a) Use T-accounts to open a bank account and the accounts for the debtors and creditors at

1 September.

(b) Record the above transactions for September. ‘

13.6A At 1 September the financial position of Sara Young’s business was:

Ksh

Cash in hand 80

Balance at bank 900

Debtors - AB 200
 - CD 500
- EF 300

Stock 1,000

Creditors – GH 600

IJ 1,400

During September:

1 The three debtors settled their accounts by cheque subject to a cash discount of 4%.

2 A cheque for Ksh100 was cashed for office use.

3 GH was paid by cheque less 7.5%.

4 IJ’s account was settled, subject to a discount of 5%, by cheque.

5 Wages of Ksh130 were paid in cash.

Required:

(a) Open a three-column cash book and the accounts for the debtors and creditors at

1 September.

(b) Record the above transactions for September.