fty Adams Showers Ltd sells bathroom fittings on credit to most of its customers. In order to control its debt collection system, the company maintains a debtors ledger control account. In preparing the accounts for the year to 30 October 2003 the accountant discovers that the total of allthe personal balances disclosed a balance of GH12,802, whereas the debtors ledger c ontrolaccount balance disclosed a balance of GH12,550.Upon investigating the following errors were discovered.(1) Sales for the week ending 27 March 2003 amounting to GH850 had been omitted from thecontrol account.(2) A debtors account balance of GH300 had not been included in the list of balances. (3) Cash received of GH750 had been entered in a personal account as GH570.(4) Discounts allowed totalling GH100 had not been entered in the control account.(5) A personal account balance had been undercast by GH200.(6) A contra item of GH4 00 with the creditors ledger had not been entered in the control account.(7) A bad debt of GH500 had not been entered in the control account.(8) Cash received of GH250 had been debited to a personal account.(9) Discounts received of GH50 had been debited to Adams debtors ledger account. (10) Returns inwards valued at GH200 had not been included in the control account.(11) Cash received for GH80 had been credited to a personal account as GH8.(12) A cheque for GH300 received from a customer had been dishonoured by the bank, but noadjustment had been made in the control account. Requirements (a) Explain corrected debtors a ccount, bringing down the amended balance at 30 October2003.(b) Prepare a statement showing the adjustments that are necessary to the list of personal account balances so that it reconciles with the amended debtors ledger control account balance.

22. Discuss the principal objects of an audit. 23. What are the advantages of internal check? 24. What are the points to be considered by the auditor while examining vouchers 25. Discuss the nature of mechanical system of accounting. 26. Discuss on the contents of an audit report.

(a) n the measurement ot protit, partnership salaries are treated as an appropriation while directors fees on the other hand, are treatea aS an expense. Explain the difference for this treatment. (4marks) (6) The following balances were extracted from the books of Meza Ltd. on 30 June 2019: h. 000 Authorised and issued share capital: Ordinary shares (Sns. par vauc 10% preference shares (Sh.10 par value) Inventory as at 30 June 2019 Accounts receivable and prepayments I50,000 95,178 40,800 20,: ,583 Accounts payable and accruals 5ank balance 12%% debentures 694 24.000 42,000 General reserves d debts rss proft tor the year 122.204 42,300 Insurance nd Telephone expenses o30 Electricity and water Debenture interest AA0 Directors tees 750 ueneral expenses Motor vehicles (cost Sh.59.100,00o) Ofice tumiture and equipment (cost Sh.36,960,000) Land and buildings at cost Profit and loss account (1 July 2018) 4.662 40.200 11,160 98,060 36.378 Additional information 1. Depreciation is to be provIded as tollows: oor venicies at a rate of 20o per annum on cost. ice furniture and equipment at a rate of 15% per annum on cost. AS a 0 une z019, an amount of Sh.822,000 for elcctricity consumed has not been paid. ne insurance expense amount on 30 June 2019 mcludes an amount of Sh.450.000 paid in June 2019 for the period of 1 July 2019 to 30 September 2019. 2.

** ne insurance expense amount on 30 June 2019 includes an amount of Sh.450,000 paid in June 2019 for the period or July 2019 to s0 September 2019. rOvISiOns IOr the tollowing are to be made: Sh. "0000 Directors tees Audit The directors recommended that: Sh.18.000,000 be transfemed to the general reserve. ,200 prefe ences rcuvidend De paid. A 1070 Ormary snare uvidenu De pad. Required: ncome statement and appropriation account for the year ended 30 June 2019 ( Stateinent of financial position as at 50 June 2019

Subscription received by the club during the year ended 30 June 2019 are as follows: Year Sh. "000 9,000 114,300 20,700 The club decided to write off subscription arrears amounting to Sh.9.000.000. Canteen sales amounting to Sh.4,500.000 in cash were omitted from the records. Depreciation is charged on a straight line basis as follows: 2018 2019 2020 Asset Rate Sports equipment Furniture and fittings During the year ended 30 June 2019, sports equipment was disposed of at Sh.9,000,000 on credit. The equipment had cost Sh. 18,000.000 and had been in use for two years. During the year ended 30 June 2019, the club house was extended at a cost of Sh. 18.000,000. This was not recorded in the books. 20% per annum 10% per annum red: Canteen income statement for the year ended 30 June 2019. Income and expenditure statement for the year ended 30 June 2019. Statement of financial position as at 30 June 2019.