QUESTION THREE [25 marks) (a) Nii Okai, a retail trader, has very limited accounting knowledge. In the absence of his

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QUESTION THREE [25 marks) (a) Nii Okai, a retail trader, has very limited accounting knowledge. In the absence of his accounting technician, he extracted the following trial balance as at 31 March 2013 from his business's accounting records: GHC GHC Stock in trade at 1 April 2012 5,350 Stock in trade at 31 March 2013 3,900 Rent received 60 Discounts allowed 155 Discounts received 165 Provision for doubtful debts 480 Purchases 47,000 Purchases returns 700 Sales 66,190 Sales returns 550 Freehold property: at cost 35,000 Provision for depreciation 1,750 Motor vehicles: at cost 7,500 Provision for depreciation 2,250 Capital - Nii Okai 42.300 Balance at bank 3,550 Trade debtors 5,650 Trade creditors 3,800 Establishment and administrative expenditure 8,300 Drawings 4,500 Short term loan 3,760 121.455 121.455 You are required to prepare a corrected trial balance as at 31 March 2013. (10 marks) (b) The following is an extract from the books of Mr. Edward Hadior that is the cash book (bank

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Corrected Trial balance 31st March 2013 Gh¢ Gh¢ Stock in trade at 1 April 2012 5,350 Rent received 60 Discount allowed 155 Discount received 165 Provision for doubtful debts 480 Purchases 47,000 Purchase return 700 Sales 66,190 Sales return 550 Freehold property : at cost 35,000 Provision for depreciation 1,750 Motor vehicles : at cost 7,500 Provision for depreciation 2,250 Capital - Nil Okai 42,300 Balance at bank 3,550 Trade debtors 5,650 Trade creditors 3,800 Establishment and administrative expenditure 8,300 Drawings 4,500 Short term loan 3,760 Suspense 3,900 Total = 121,455 121,455 Note : Closing stock in trade is the leftover balance of goods which were purchased during an accounting period but are unsold till now. If total purchase included in trial balance , then closing stock in trade should not be included in the trial balance. If the purchase has been reduced to the extent of stock amount at the end of period and depicted in the trial balance, then only closing stock in trade comes in the trial balance .Here, in the question nothing like that said about purchase (adjustment ),so closing stock in trade will not come in the trial balance . The difference between Total amount of debit and credit should be equalise or neutralise by using a suspense account of Gh¢ 3,900 (Dr)

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QUESTION THREE [25 marks) (a) Nii Okai, a retail trader, has very limited accounting knowledge

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	Gh¢	Gh¢
Stock in trade at 1 April 2012	5,350
Rent received		60
Discount allowed	155
Discount received		165
Provision for doubtful debts		480
Purchases	47,000
Purchase return		700
Sales		66,190
Sales return	550
Freehold property : at cost	35,000
Provision for depreciation		1,750
Motor vehicles : at cost	7,500
Provision for depreciation		2,250
Capital - Nil Okai		42,300
Balance at bank	3,550
Trade debtors	5,650
Trade creditors		3,800
Establishment and administrative expenditure	8,300
Drawings	4,500
Short term loan		3,760
Suspense	3,900
Total =	121,455	121,455