Skip to main content Expert Q&A Find solutions to your homework Find solutions to your homework Question (0) Adah Banda, a retail trader, with a limited understanding of accounting, compiled the subsequent trial balance as of March 31, 2023, from his business's financial records in the absence of his accountant: K K Stock in trade at 1 April 2022 10,700 Stock in trade at 31 March 2023 7,800 Discounts allowed 310 Discounts received 450 Provision for doubtful debts 960 Purchases 94,000 Purchases returns 1,400 Sales 132,100 Sales returns 1,100 Freehold property: at cost 70,000 Provision for depreciation 3,500 Motor vehicles: at cost 15,000 Provision for depreciation 4,500 Capital Adah Banda 84,600 Balance at bank 7,100 Trade debtors 11,300 Trade creditors 7,600 Establishment and administrative expenditure 16,600 Drawings 9,000 239,010 239,010 Required: prepare; (a) A corrected trial balance as at 31 March 2023. ( 9 Marks) After the preparation of the above trial balance, but before the completion of the final accounts for the year ended 31 March 2023, the following discoveries were made: (i) The correct valuation of the stock in trade at 1 April 2022 is K12,000; apparently some stock lists had been mislaid. (ii) A credit note for K210 has now been received from Linda Chipasha Limited; this relates to goods returned in December 2022 by Adah Banda. However, up to now, Linda Chipasha Limited had not accepted that the goods were not of merchantable quality and Adah Bandas accounting records did not record the return of the goods. (iii) Trade sample goods were sent to Shita in February 2023. These were free samples, but were charged wrongly at K1,000 to Shita. A credit note is now being prepared to rectify the error. (iv) In March 2023, Adah Banda painted the inside walls of his stockroom using materials costing K150 which were included in the purchases figure in the above trial balance. Adah Banda estimates that he saved K800 by doing all the painting himself. (b) Prepare the journal entries necessary to amend the accounts for the above discoveries. Note: narratives are required. (9 Marks) (c) Prepare the income statement in accordance with the accounting standards for the year ended 31 March, 2023 (10 Marks) (d) Prepare the statement of financial position as at 31 March, 2023 in accordance with the accounting standards