4. (a) (i) Prepaid rent at the beginning of the period was sh. 40,000 and sh. 20,000 was not paid last year. During the year payments of sh. 320,000 was made with respect to rent. It was established that at the end of the period prepaid rent should be sh. 60,000. Without using Taccount compute the amount of rent expenses to be transferred to profit and loss account.
(ii) Accrued wages at the beginning of the month was sh. 240,000. At the end of the month sh. 690,000 was transferred to profit and loss account and sh. 10,000 was prepaid. Sh. 320,000 of wages was accrued but not yet paid during the month. Without using Taccount compute the amount of wages paid during the year.
5. (a) Majura and Majuni enter a joint venture to share profits or losses equally resulting from dealings in secondhand digital TVs. Both parties take an active role in the business, each recording his own transactions. They have no joint banking account or separate set of books.
1 Majura buys four TVs for a total of sh. 110,000.
3 Majura pays for repairs sh. 84,000.
4 Majuni pays office rent sh. 30,000 and advertising expenses sh. 9,000.
6 Majuni pays for packaging materials sh. 3,400.
7 Majuni buys for a TV in excellent condition for sh. 60,000.
31 Majura sells the five TVs to various customers, the sales being completed on this data and totalling sh. 310,000.
Show the relevant accounts in the books of both joint venturers.
(b) On 31balance of sh. 15,000. The monthly bank statement written up to 31st December, 2008 the bank column of Tengeneza’s cash book showed a debitst December, 2008 showed a credit balance of sh. 29,500.
On checking the cash book with the bank statement it was discovered that the following transactions had not been entered in the cash book:
Dividends of sh. 2,400 had been paid directly to the bank.
A credit transfer TRA and Customs VAT refund of sh. 2,600 had been collected by the bank.
Bank charges sh. 300.
A direct debit of sh. 700 for the Charity subscription had been paid by the bank.
A standing order of sh. 2,000 for Tengeneza’s loan repayment had been paid by the bank. Tengeneza’s deposit account balance of sh. 14,000 was transferred into his bank current account.
A further check revealed the following items:
Two cheques drawn in favour of Tamale sh. 2,500 and Fadiga sh. 2,900 had been entered in the cash book but had not been presented for payment.
Cash and cheques amounting to sh. 6,90 had been paid into the bank on 31st December, 2008 but were not credited by the bank until 2nd January, 2009.
(i) Bring the cash book (bank column) up to date, starting with the debit balance of sh. 15,000, and then balance the bank account.
(ii) Prepare a bank reconciliation statement as at 31st December, 2008.
(b) Machinery is bought on 12006 for sh. 120,000. The first machinery is sold on st January, 2005 for sh. 100,000 and another one on 130th June, 2007for sh. 72,000. Thest October,
business’s financial year ends on 31st December. The machinery is to be depreciated at 10 per cent per annum, using the straight line method. Machinery in existence at the end of each year is to be depreciated for a full year. No depreciation is to be charged on any machinery disposed of during the year.
From the given information, draw up accumulated provision for depreciation account for three years.