QUESTION ONE From the following information below extracted from the books of Nsokuronsuo, a sole trader, prepare a three column cash book, post the transactions to their respective ledgers and extract a trial balance for the month of July. July 1: Balance brought forward: Cash GH48,000; Bank GH165,000. 3: Credit purchases from Abusua Dwarfs GH36,000. 5: The following paid him by cheque in each case deducting a 7.5% cash discount. Olympics GH24,000, Kotoko GH15,000 and Hearts GH28,500. 7: Paid the following expenses by cheque: Insurance GH9,000, Rent and Rate GH16,500 and Electricity GH7,500. 9: Cash Sales GH67,500. 11: He paid the following accounts in cash in each case deducting 15% cash discount: Chelsea GH24,000, Arsenal GH15,000 and Man United GH19,500. 13: Cash Sales GH49,500 immediately banked. 13: Sales made to Palm Wine Tappers GH51,600. 15: Paid Water bill GH30,000 by cash. 15: Bought Property, Plant and Equipment GH75,000 by cheque. 19: Paid Abusua Dwarfs account in full GH30,000 by cash. 21: Withdrew cash from the bank for business use GH55,500. 21: Palm Wine Tappers paid their account in full GH48,000 by cheque. 23: He paid the following by cheque: Messi GH16,500 less 30% cash discount, Ronaldo GH13,500 less 22.5% cash discount and Mbappe GH9,000. 25: Bought Machine by cheque GH75,000. 29: Cash Purchases GH52,500. 30: Cash Sales GH45,750. QUESTION TWO At the end of each month, Sarah prepares a bank reconciliation statement for her business bank account. At 31st May 2020 her bank statement showed that she had funds of GH393 at the bank. She has the following information: (i) The bank debited Sarahs account with charges of GH387 during May. Sarah has not recorded these charges. (ii) Sarah arranged for GH7,500 to be transferred from her personal bank account into the business bank account. The bank made the transfer on 30th May, but Sarah has not made any entry for it in her records (iii) On 22nd May, Sarah withdrew GH300 cash which she did not record. (iv) Cheque Number 4562980, which Sarah issued to a supplier, appears on the bank statement as GH1,950. Sarah incorrectly recorded the cheque as GH1,680. (v) On 31st May, Sarah lodged GH1,371. On the bank statement, this amount is dated 3 rd June. (vi) Sarah was advised by the bank that she earned GH156 interest for the period in May that her account was in credit. Sarah recorded this in May, but the bank did not credit her account until June. (vii) Three of the cheques issued in May, with a total value of GH2,826 were not debited on the bank statement until after 31st May. (viii) A cheque for GH828 issued to a supplier was cancelled but Sarah has not recorded the cancellation of the cheque. Required: (a) Show the bank account in Sarahs general ledger, including any adjusting entries required due to the information given. (b) Prepare a reconciliation of the bank statement balance to the corrected balance on the bank account in Sarahs general ledger. (c) Discuss five items that account for the differences between the cashbook balance and bank statement balance. QUESTION THREE a. On 1st July, 2015 COVID- 19 Ltd (COVID- 19) purchased a plant for GH195,000 and spent GH5,000 on its installation. COVID- 19 decided to provide depreciation at 7.5% per annum, using written down value method. On 30th November, 2018 the plant was dismantled at a cost of GH2,500 and then sold for GH50,000. On 1st December, 2018 COVID- 19 acquired and put into operation a new plant at a total cost of GH380,000. Depreciation was provided on the new plant on the same basis as had been used in the case of the earlier plant. COVID- 19 closes its books of account every year on 31st March. Prepare Plant Account and Depreciation Account for four accounting years ended 31st March. 2019. b. If a company continues to use equipment past the useful life that was assumed in determining the depreciation, there will be no depreciation expense in the additional years. Is this statement true? Explain. c. The value of a plant is depreciating at 2.5% per annum and is GH631,750 after two years. What was its original price?