(a) Mr Bush Phiri runs a business providing equipment for bakeries. He always makes a note of his credit sales but he is not sure on how to account for VAT on his sales. Currently, the VAT rate is 16%. During the first week of March 2018 , the following credit sales took place. All figures include VAT. March 1K. Banda bought cake tins priced at K 580. March 3 F. Jere bought K1 392 worth of equipment. March 4 W. Sashi bought a new oven for K4 640. March 6 P. Patrice purchased goods at a cost of K2 552. March 7K. Banda bought some oven-proof dishes at a cost of K696. Required: Enter the above transactions in Mr Bush Phiri's sales day book clearly showing for each transaction the net sales value, VAT amount and the Invoice amount. (6 marks) (b) The trial balance of Buumba Ltd has an excess of debit balances over credit balances of K24, 995. A suspense account has been opened to balance the trial balance. The following transactions were later discovered: (i) Interest paid of KS,000 and Interest received of KK,000 have both been entered on the watong side of the trial balance. (ii) The receivable control account bulance of K224, 387 had been included in the trial belance as K242,387 (iii) Sales of K3, 000 had been omitied from the sales reconds (i.e. frum the sales day book) (iv) Purchase of raw material of K4,005 was cmered in the purchase account as K4,500. (iv) The balance on the carrent account af K12, 500 for the Propristor's wife had been omined from the trial balance. This item when corrected will clear the suspense account. Required: State and explain three (3) errors that will not affect the balancing of a trial holance and open a suspense account and correct the above transactions in it. (femarlas) (c) LG Ldd has prepared its October 2021 bank recenciliation for auditors to reviaw; As at 31 October 2021 the ledger balance was K2, 450 (Crodis) but she bank statement showed that the company has funds amounting to K3,743. The following are useful information: (1) The company arranged for the bank to transfor the dollar equivalem of K500, 000 se a supplict in the United States. Charges on the transfer of 0.5% h have not becn recorded in the books of LG Led. (2) The CEO of LG Ltd arranged for an amoust of K3,000 to be transferrod from his perwotal bank account into the company's account. The bank made the transfer on 31 October 2021, hut LG LUd has sot made any entry in its booke (3) A Cheque for ZESCO (Electricity Compaty) amounting to KS, 600 fsued and rocorded cosrectly in the bank statenketts appeared in L.G ledger as K6, S00. (4) The following cheues issued by LG Ltd in October 2021 did not appear as the bank satement: Cheqae * 20450K2,000 Cheque in 20456 - K4, 800 Cheque 120500K5,250 (5) Income carned on investment with an advice by the bank of K2,457 was net recorded by the bank until 3 November 2021. (6) Three cheques received and booked by LG Ltd anounting to K4, s00 were not credined by the bank. Required: (i) Prepare the bank accouat in L.G L.d nominal ledger including any adjusaing cntries based on the informarion above. (Amarks) 2 (ii) Prepare a reconciliation of the bank statement balance to the corrected bulance on the bank account in LG L.td nominal ledger. (4marks) [Tetal:20 Marks]
