QUESTION TWO (a) The records of Yinimi Enterprises are in a complete mess. The owner of the business, Mr. Daboug Yinimi, has asked you to write up his books and prepare accounts for the calendar year 2019.From pieces of information gathered from note books, receipts, books and invoices, and in discussions with Mr. Yinimi and his sales girl, you ascertain the following facts. 1. That the firm started operations on 19 January,2019, Mr. Yinimi opened a bank account for the firm and put into it GH60,000 from his past savings to start the business. A further GH20,000 cash was kept by Mr. Yinimi to meet immediate expenditure. 2. Mr. Yinimi had a kiosk constructed at Tongo Market from which he operated his business. The total cost of the kiosk was GH30,000 for which he drew a cheque for GH24,000 in favour of the supplier/contractor on 15 January, 2019. Furniture worth GH14,000 was bought in cash on the same day. 3. On 15 January, 2019, Mr. Yinimi engaged a sales girl whom he paid GH25 for each working day of a six-day working week. The salesgirl was paid for 50 weeks during the year ended 31"December 2019from cash takings before banking on the last day of each month. 4. During the year assorted goods worth GH120,000 were purchased for sale 5. An analysis of the cheque stubs revealed the following payments: A rough note book kept by Mr. Yinimi also reveals that certain bills were outstanding whilst some payments had been made from daily cash sales before banking. The disclosures are as follows: Purchases 110.000 Electricity and water 1.700 Rent and Rates (1/1/19 - 31/3/20) 900 Standard Assessment - Income Tax 1.000 Transport Charges 5,000 Kiosk Doctor Kiosk 6,000 Entertainment Decoration 160 80 Page 3 of 10 Examiner Daboug Bright Christopher Travelling and Transport Drawings Printing and Stationery Postages, Telephones and Telegrams Donation - BolgaChildren's Home 420 24500 1.050 610 500 1,780 60 Payments Outstanding from Cash Bills GH GH Entertainment 40 Travelling and Transport 80 Drawings (Mr. Yinimi) 500 Electricity and Water 120 720 Postages, Telephones and Telegrams Salary advance to salesgirl 1.000 Printing and Stationery 250 8.It is ascertained from the correspondence file that Mr. Yinimi has written to the Electricity Company for the refund of GH70 being another customer's bill wrongly addressed to him and which he had inadvertently paid. The same file also discloses that 1st July, 2019, GH100,000 in cash was given to Mr. Yinimi by his mother-in-law for the business as at interest rate of 5% per annum repayable at the end of 2021. The amount was used to purchase a used Nissan Pick-up motor vehicle for the business. No interest was paid on the loan for the year ending 31 December; 2019. 9. It is the policy of the business to bank daily sales the following morning after necessary expenses have been met there from. For the year total banking amounted to GH182,500 including credit sales paid for. The firm gives no discounts and received none. The bank statement revealed that bank charges for the year amounted to GH600. Cash on hand at 31 December, 2019 was GH5.410 10. Although the firm insisted on cash sales it allowed a few credit sales to well-known customers. Total credit sales for the year amounted to GH25,000 of which GH7,000 were outstanding at 31 December 2019. An alien credit customer, Peaceman was shot dead by armed robbers who took away all his belongings. He does not have any relatives around on whom Mr. Yinimi could call for the GH200 he owed. A provision of 5% should be made for other doubtful debts. 11. It is agreed between you and Mr. Yinimi that all the assets of the business are to be depreciated over a period of 5 years using the straight-line method. According to Mr. Yinimi, stock balances (at cost) at 31st December, 2019 were as follows: Page 4 of 10 Examiner Daboug Bright Christopher GH 10,000 400 Goods for sales Stationery You are required, from the information available to you, to prepare: (a) Income Statement of Yinimi Enterprises (b) Statement of financial position as at that date. QUESTION TWO (b) With specific reference to principles of accounting in accounting, identify and demonstrate any five (5) practical relevance of its studies to any business organization. QUESTION TWO (a) The records of Yinimi Enterprises are in a complete mess. The owner of the business, Mr. Daboug Yinimi, has asked you to write up his books and prepare accounts for the calendar year 2019.From pieces of information gathered from note books, receipts, books and invoices, and in discussions with Mr. Yinimi and his sales girl, you ascertain the following facts. 1. That the firm started operations on 19 January,2019, Mr. Yinimi opened a bank account for the firm and put into it GH60,000 from his past savings to start the business. A further GH20,000 cash was kept by Mr. Yinimi to meet immediate expenditure. 2. Mr. Yinimi had a kiosk constructed at Tongo Market from which he operated his business. The total cost of the kiosk was GH30,000 for which he drew a cheque for GH24,000 in favour of the supplier/contractor on 15 January, 2019. Furniture worth GH14,000 was bought in cash on the same day. 3. On 15 January, 2019, Mr. Yinimi engaged a sales girl whom he paid GH25 for each working day of a six-day working week. The salesgirl was paid for 50 weeks during the year ended 31"December 2019from cash takings before banking on the last day of each month. 4. During the year assorted goods worth GH120,000 were purchased for sale 5. An analysis of the cheque stubs revealed the following payments: A rough note book kept by Mr. Yinimi also reveals that certain bills were outstanding whilst some payments had been made from daily cash sales before banking. The disclosures are as follows: Purchases 110.000 Electricity and water 1.700 Rent and Rates (1/1/19 - 31/3/20) 900 Standard Assessment - Income Tax 1.000 Transport Charges 5,000 Kiosk Doctor Kiosk 6,000 Entertainment Decoration 160 80 Page 3 of 10 Examiner Daboug Bright Christopher Travelling and Transport Drawings Printing and Stationery Postages, Telephones and Telegrams Donation - BolgaChildren's Home 420 24500 1.050 610 500 1,780 60 Payments Outstanding from Cash Bills GH GH Entertainment 40 Travelling and Transport 80 Drawings (Mr. Yinimi) 500 Electricity and Water 120 720 Postages, Telephones and Telegrams Salary advance to salesgirl 1.000 Printing and Stationery 250 8.It is ascertained from the correspondence file that Mr. Yinimi has written to the Electricity Company for the refund of GH70 being another customer's bill wrongly addressed to him and which he had inadvertently paid. The same file also discloses that 1st July, 2019, GH100,000 in cash was given to Mr. Yinimi by his mother-in-law for the business as at interest rate of 5% per annum repayable at the end of 2021. The amount was used to purchase a used Nissan Pick-up motor vehicle for the business. No interest was paid on the loan for the year ending 31 December; 2019. 9. It is the policy of the business to bank daily sales the following morning after necessary expenses have been met there from. For the year total banking amounted to GH182,500 including credit sales paid for. The firm gives no discounts and received none. The bank statement revealed that bank charges for the year amounted to GH600. Cash on hand at 31 December, 2019 was GH5.410 10. Although the firm insisted on cash sales it allowed a few credit sales to well-known customers. Total credit sales for the year amounted to GH25,000 of which GH7,000 were outstanding at 31 December 2019. An alien credit customer, Peaceman was shot dead by armed robbers who took away all his belongings. He does not have any relatives around on whom Mr. Yinimi could call for the GH200 he owed. A provision of 5% should be made for other doubtful debts. 11. It is agreed between you and Mr. Yinimi that all the assets of the business are to be depreciated over a period of 5 years using the straight-line method. According to Mr. Yinimi, stock balances (at cost) at 31st December, 2019 were as follows: Page 4 of 10 Examiner Daboug Bright Christopher GH 10,000 400 Goods for sales Stationery You are required, from the information available to you, to prepare: (a) Income Statement of Yinimi Enterprises (b) Statement of financial position as at that date. QUESTION TWO (b) With specific reference to principles of accounting in accounting, identify and demonstrate any five (5) practical relevance of its studies to any business organization