7,800 Q3. Thomas Smith, 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 20X8 from his business's accounting records: GHS GHS Stock in trade at 1 April 20X7 10,700 Stock in trade at 31 March 20X8 Discounts allowed 310 Discounts received 450 Provision for doubtful debts 960 Purchases 94,000 Purchases returns 1,400 Sales 132, 100 Sales returns 1,100 Freehold property: at cost 70,000 84,600 Provision for depreciation 3,500 Motor vehicles: at cost 15,000 Provision for depreciation 4,500 Capital - Thomas Smith Balance at bank 7.100 Trade Accounts Receivable 11,300 Trade Accounts Payable Establishment and administrative expenditure 16,600 Drawings 9,000 39,010 Required: (a) Prepare a corrected trial balance as at 31 March 20X8. 7,600 239,010 After the preparation of the above trial balance, but before the completion of the final accounts for the year ended 31 March 20X8, the following discoveries were made: (i) The correct valuation of the stock in trade at 1 April 20X7 is GHS 12,000; apparently some stock lists had been mislaid. (ii) A credit note for GHS210 has now been received from J Hardwell Limited; this relates to goods returned in December 20X7 by Thomas Smith. However, up to now J Hardwell Limited had not accepted that the goods were not of merchantable quality and Thomas Smith's accounting records did not record the return of the goods. (iii) Trade sample goods were sent to John Grey in February 20X8. These were free samples, but were charged wrongly at GHS1,000 to John Grey. A credit note is now being prepared to rectify the error. (iv) In March 20X8, Thomas Smith painted the inside walls of his stockroom using materials costing GHS150 which were included in the purchases figure in the above trial balance. Thomas Smith estimates that he saved GHS800 by doing all the painting himself. (b) Prepare the journal entries necessary to amend the accounts for the above discoveries. Note: narratives are required