Analyze the following questions and answer.

QUESTION 1

Kasabrunu Enterprise is a business operating in the second-hand clothing in Kwadaso. Mr. Bruni the owner of Kasabrunu Enterprise (KE) employed Mr. Ojidomi a BSc. Accounting graduate as the Accountant. Business is booming and KE is expected to be in operation for a long time. Mr. Odjidomi has been with the business for 5 years and has assured Mr. Bruni that profits declared will not be deceptive since the same method will be continuously used for the accounting treatment of similar items until Mr. Bruni decides to change from dealing in second hand clothing to the purchase and sale of spare parts which they discussed. As part of the policy adopted by the business, the Accountant records only transactions that can be valued in monetary terms in the books of account and produces financial information at regular period for the perusal of Mr. Bruni.

On reaching home, Sefakor Ojidomi, the daughter of Mr. Ojidomi who is pursuing an accounting programme in Owusuwusu College of Accountancy asked his father to guide her with an assignment. Sikadanka, the Chairman and CEO of Defenders Ltd recently confronted the Chief Accountant of the company over the way and manner the financial statements were presented for the 2019 financial year. The following points are summaries of the CEO's reservations about the financial statements:

a. He argued that the values of the company's assets be shown at current market values since these values will provide a better view of the company's value. The Chief Accountant is still insisting that the assets should be stated at original cost. b. He expressed shock when the financial statements did not show a value for the company's efficient staff. He argued that the company's beautiful and handsome sales personnel are valuable assets used to attract customers and therefore insisted that this "power of attraction" should be recognised in the books of accounts and reflected on the face of the financial statement. c. He was worried when a potential sale of millions of Ghana cedis to a certain buyer from whom purchase orders have been received have not been recognized in the books of accounts as sales. The Chief Accountant argued that these potential customers have only been sent pro-forma invoices and so are not obliged to pay the company. d. The CEO recently bought a saloon car for his son out of company funds. The Chief Accountant recorded this on a current account for the CEO. This resulted in an intense argument. The CEO threatened to dismiss the Chief Accountant should he refuse to recognize the purchase of the saloon car as a transaction of the company. e. The CEO insisted that the value of expired inventory should be maintained in the books of accounts and not written off.

Sefakor presented the assignment and scored a 100% for the 1st time.

On the 27th of March, 2019, Mr. Ogboro, the purchasing officer of KE prepared documents to purchase on credit 1,500 bales of second-hand clothing from Osimeyo and brothers (OB.). O.B delivered the goods to KE 4 (four) days after the order was placed with all appropriate documents. KE only deals in male second-hand clothing but included in the goods delivered were 15 bales of ladies second-hand clothing which Mr. Ogboro returned to OB as it did not meet the description provided. Customers purchased the goods either on credit or outright payment with cash or cheque. Documents showing evidence of payment were given to these

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customers. All customers who purchased on credit paid through their bankers by transfers made directly to the bank accounts of KE. KE is later advised accordingly by her bankers. Mr. Odjidomi prepares bank reconciliation statements quarterly. He made a request on the 15th of March 2019 for a bank statement from Obidibi commercial bank. Upon receipt of the bank statement, he compared the balance with that of the Cash book and it did not agree. The Accountant's friend, Oyeni Bawabawat, an accounts officer at Oshikishiki Enterprise requested for reasons for the disagreement. He confessed his inability to grasp these reasons during his studies. After an in-depth explanation, Mr. Odjidomi, the Accountant asked his friend to assist him prepare a bank reconciliation statement as he had to urgently attend an important meeting. The Accountant provided his friend with the information below:

The cash book, bank column of Kasabrunu Enterprise showed a credit balance of GHS578,000 while the bank statement for the period showed a debit balance of GH338,000 on 31st March,2019. A thorough investigation revealed the following:

i. Cheques drawn amounting to GHS195,0000 had not been presented to the bank for payment. ii. A cash deposit into the bank of GHS97,800 was recorded as GHS79,800 in the cash book. iii. Bank charges of GHS10,900 and standing order payment of GHS12,100 relating to telephone bills entered on the bank statement had not been recorded in the cash book. iv. A cheque of GHS245,000 drawn by the firm had been charged by the bank in error to another customer's account. v. A dividend of GHS15,000 paid directly to the bank had not been entered in the cash book. vi. A cheque for GHS20,000 paid into bank had been dishonoured and shown as such by the bank but no entry of the dishonour had been made in the cash book. vii. The following cheques and cash deposits entered in the cash book and paid to the bank have not been credited by the bank: cash deposits GHS76,500; cheques receipts: Maame Dakona GH54,500; Ntekuma Ananse GHS34,000. viii. A cheque drawn for GHS32,000 had been entered in the cash book in the error GHS23,000. ix. A cheque for GHS16,000 drawn by another customer of the same name had been charged to the firm's bank account in error.

After adjusting the cash book balance, Oyeni Bawabawat prepared the bank reconciliation statement. After waiting for 3 hours, he was informed that Mr. Odjidomi will be in the meeting for 6 hours. Oyeni then left for his office.

Required: A i) Identify and explain two (2) accounting policies adopted by Kasabrunu Enterprise (1mark) ii) State the accounting concept in each of the CEO's reservation in Sefakor's assignment. Explain your reason for choosing the concept. NB: Present your answer in a tabular form as illustrated below Concept/Principle Definition/Explanation Reason (5 marks)

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B. Identify and explain the use of three (3) source documents in the transaction to purchase and sell 1,500 bales of second-hand clothing. (4.5 marks)

C. i) State and explain six (6) reasons Mr. Odjidomi will give to his friend for the disagreement in the cash book and bank statement balances. (3 marks) i) Imagine you are Oyeni Bawabawat. Show the appropriate adjustments to be made in the cash book (4.5 marks) ii) Prepare a Bank Reconciliation Statement for Mr. Odjidomi. (2 marks) (Total 20 marks)

QUESTION 2

Halibatu, a sole trader, deals in phones and computer accessories at the Ohiamankwa Enterprise. The following Trial Balance was extracted from her books at 31st December, 2019

DR. CR. GHS'000 GHS'000 Drawings & Capital 2,128 18,043 Receivables & Payables 7,689 5,462 Purchases & Sales 62,101 122,242 Rent & Rates 900 Gas &Electricity 246 Carriage 200 Salaries & Wages 8,268 Bad debts 247 Allowance for receivables 326 Inventory (1/1/2019) 9,274 Insurance 172 Discounts 150 350 Advertising 933 Cash at bank & on hand 2,142 Investment in 91-Day Treasury Bills 740 Interest on investment received 56 Motor Vans at cost 16,000 Computers (cost GH5million) 3,600 Provision for depreciation: Motor Vans 8,600 Motor Expenses 861 Returns 232 54 Rent received 750 Freehold premises at cost 40,000 155,883 155,883

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Additional information: a) Inventory as at 31st December, 2019 was GHS 9,884,000 b) Rent & Rates paid covered the period 1st January, 2019 to 31st March, 2020. c) Some tenants have not yet paid their rent to Ohiamankwa Enterprise. The amount involved was GHS 250,000. d) Electricity bill of GHS 85,000 for December, 2019 has just been received. Halibatu intends to pay within the third week of January, 2020. No record has been made in the books. e) GHS 80,000 out of total carriage of GHS 200,000 relates to carriage on purchases made f) Allowance for receivables is adjusted to 5% of total receivables at the end of the year. g) An amount of GHS 202,000 was spent on the personal vehicle of Halibatu. This was included in the motor expenses. h) Depreciation is to be charged on vans at annual rate of 20% on cost. Computers are to be depreciated at the rate of 25% using the reducing balance method.

You are required to prepare: i) Income statement for the year ended 31st December, 2019 (10 marks) ii) Statement of financial position as at 31st December, 2019 (10 marks) (Total 20 marks)

QUESTION 3

A The agreement of the trial balance totals is an indication that all transactions have been properly recorded in the books of accounts. Do you agree with this statement?

Required: Outline 4 reasons to justify your response. (8 marks)

B ABC Ltd started business on 1/1/14, and its financial year ends on 31st December each year. The following information was extracted from the company's asset register. DATE TRANSACTION AMOUNT (GHS) 2016 January, 1 Purchased one motor van 58,500 2016 September, 1 Purchased two motor vans 78,000 each 2018 March, 1 Purchased one motor van 45,200 2018 May, 2 Sold the motor van purchased in January,2016 18,240 2019 April 1 Purchased three motor vans 62,000 each

Additional Information The company's policy is to depreciate Motor vehicles at a rate of 20% per annum on cost. You are required to prepare: i) The Motor vehicles account (2016-2019) (4 marks) ii) Provision for depreciation account (2016-2019) (4 marks) iii) Disposal account for 2018 (2 marks) iv) Statement of profit or loss extract for 2018 and 2019 (1 mark) v) Statement of financial position extract for 2018 and 2019....

15. Consider the model output below for a multiple regression to predict overall cruise ship rating from the listed predictors. Use it to answer Questions 15 & 16. Regression Analysis: Overall versus Itineraries/Schedule, Shore Excursions, Food/ Dining Model Summary S Past: 3:15.91 (adi) Base (tired) 1.38775 74.98% 70-29% 58-09% Qeefinieuhe Rem Reef SE eet 1:13.131: Rising VIF Constant 35.6 13.2 2.69 0.016 Itineraries/Schedule 0.110 0 . 130 0. 85 0. 407 1 . 05 Shore Excursions 0.2445 0.0434 1.07 Food/Dining 0.2474 0.0621 3.93 0.000 1.01 What are the missing T-Vaiue and P-Value for Shore Excursions? 16. Which of the following statements below are true? a. IfItineraries/Schedule is removed from the model, the multiple R-squai'ed will decrease. b. If Itineraries/Schedule is removed from the model, the adjusted Rsquared will decrease. c. If ItinerariesfSchedule is removed from the model, the multiple Rsquared will increase. (1. Cannot be determined based on the given information. Note 11 An investment property measured using the fair value model was sold for cash on 31 December 2019 for (217,500. The property had originally cost 4). Compare this 1with the exact answer. . a. Use the central limit theorem to calculate b, c, and d, for given a, in the statement Pr(ixi2nu+avrno)'='c+b(d) where the life are independent and identically distributed with mean p. and variance er2 and M2) is the (Li. of the standard normal distribution. b. Evaluate the probabilities in Exercise 2.8(c) by use of the normal approximation developed in part (a). . A random variable 11 has m.g.f. Mu{t) = (1 23-9 \"i a. Use the m.g.f. to calculate the mean and variance of U. b. Use a normal approximation to calculate points yum and Ham such that Pr(l.I > 1;.) = e. 7.00 7.00 10.00 Summit Only ONE page as ONE FILE.....That One Page is a CORRECTLY Labelled with the Graphs drawn to scale. 1. Make sure your Full Name Is at the Top of the Page. 2. Make sure your Full Name is in the File Name you Upload into Moodle. Answer the following questions while drawing the Two-Tier Graph. 1. Set up a Two-Tier Graph: Indifference Curves and Budget Lines in the top graph and the demand curve for potatoes in the bottom graph. It MUST be DRAW to SCALE to work out property. Use a RULER, and make sure EVERYTHING is WELL LABELED and NEAT! (2 Marks for OVERALL Neatness and Organization] You can NOT use a computer program to generate your answer. It MUST Be done by Hand. Steak is on the Vertical Axis with Potatoes on the Horizontal Axis. 2. Plot the 2 Indifference Curves given above. Making sure to label each point on both indifference Curves., with the appropriate assigned Letter. Label the two indifference Curves IC1 and IC2, respectfully. {3 Marks) Each of the following must be calculated and put on the graph in the appropriate place. I will be marking your graph and if the correct numbers are correctly placed on the graph, I will know if your calculated answers are right. You do NOT have to show me your work. But rather prove to me on your Graph the answers are correct. 3. The Original Best Affordable Point: Point E1 1. Draw the Budget Line (B1) with the correct, Vertical Intercept; Horizontal Intercept; & Slope. Label the line, B1. (1 Mark} 2. Indifference Curve (IC1) will be just tangent to the BI where the MRS = Relative Price Ratio. If you calculate this correctly you will determine the exact quantities of Steak _ and Potatoes that confirms MRS = Pp1/Ps. (0.6 of a Mark) 3. Hint: If you calculate the MRS for Indifference Curve (IC1), in other words fill in the table above,it will help you confirms your answer. You do not have to hand in the table for marks. It is there just to help you get the Point E1 right on the graph. 4. Label this Point of tangent of IC1 to B1 as Point "E1". (Hint: E1 will be one of the points in the table above in IC1.) (0.5 of a Mark} 5. Draw lines out to the both axis and label the amount of Steak as $1 and the amount of Potatoes as P1. (0.5 of a Mark) 3. The NEW Best Affordable Point; Point E2 When the price of potatoes falls from $12.00 to $4.00 a bag, the new price is Pp2, The price change will cause the budget line to move from B1 to B2. Draw in the new budget line and find the New Best Affordable Point: Point E2, MacBook Pro