HEXCO EXAMINATION QUESTION PAPERS

BASIC ACCOUNTS FROM MARCH/APRIL 2015 TO MARCH/APRIL 2020.

THESE ARE ANSWER ALL AND THREE (3) HOUR QUESTION PAPERS

MARCH/APRIL 2015

QUESTION 1 (25 Marks)

John and Mary are partners in a wholesale business sharing profits and losses in the ratio 3:2. The
partners are entitled to interest on capital at 5% per annum, but they have to pay interest on
drawings at the rate of 10% per annum. The following trial balance was extracted from their records
on 31 December 1989:

TRIAL BALANCE AS AT 31 DECEMBER 1989

$ $
Capital accounts 1/1/89
John 15 000
Mary 10 000
Current accounts 1/1/89
John 3 600
Mary 1 200
Drawings
John 1 500
Mary 2 000
Salaries
John 8 000
Stock 1/1/89 6 700
Accounts receivables and payables 4 300 5 645
Purchases and sales 26 200 100 000
Freehold premises 25 000
Plant and machinery at cost 17 000
Accumulated depreciation on plant and machinery 5 625
Motor vehicles at cost 15 000
Accumulated depreciation on motor vehicles 3 800
Administrative salaries and wages 30 000
Electricity and water 2 250
Cash at bank 4 180
Cash on hand 340
143 670 143 670

Additional information is provided as follows:

a) Stock-in-trade on 31 December 1989 was $7 100.

b) Plant and machinery and motor vehicles are to be depreciated by 10% on cost.
c) John has already drawn his salary from the bank.
REQUIRED:

Prepare a statement of comprehensive income and a statement of financial position.

QUESTION 2 (15 Marks)

Prepare a Manufacturing Account and a Trading Account from the following balances:

Stocks at cost 1 July 1995 $

Raw materials 20 400

Finished goods 25 000

Stocks at cost 30 June 1996

Raw materials 18 800

Finished goods 26 200

Carriage on sales 3 800

Factory overheads 26 600

Direct wages 88 000

Bad debts 600

Purchases of raw materials 156 500

Carriage on raw materials 2 800

Sales office expenses 7 800

Depreciation of factory equipment 12 400

Depreciation motor car 1 500

Factory direct expenses 3 600

Sales of finished goods 350 000

QUESTION 3 (20 Marks)

The following are extracts from the cashbook and the bank statement of O.C.Supermarket:

CASHBOOK (BANK COLUMNS ONLY)

2012 2012
Oct 1 Balance b/d 13 000 Oct 5 Purchases 20 500
4 B.Moyo 4 500 12 City council 16 000
8 C.Calvin 6 000 16 Zesa 8 000
17 S.Sarawoga 3 200 23 Insurance 9 500
22 L.Dube 5 500 26 Purchases 25 000
27 M.Gora 3 750
31 Balance c/d 43 000
79 000 79 000
Nov 1 Balance b/d 43 000

BANK STATEMENT

DATE DETAILS DEBIT ($) CREDIT ($) BALANCE ($)

2012
Oct 1 Balance b/d 13 000
4 Deposit 4 500 17 500
5 0031 20 500 3 000O/D
8 Deposit 6 000 3 000
12 0032 16 000 13 000O/D
17 Deposit 3 250 9 750O/D
22 Deposit 5 500 4 250O/D
23 0034 9 500 13 750O/D
31 Interest on bank overdraft 2 350 16 100O/D
Dividends 7 150 8 950O/D
Ledger fees 2 350 12 000O/D

REQUIRED:

a) Update the cashbook.

b) Draw up the bank reconciliation statement on 31 October 2012.
QUESTION 4 (15 Marks)

The following details are available from the books of Enos Dube. Prepare a sales ledger control
account and purchases ledger control account:

1996 $

May 1 Sales Ledger Control Account b/f 10 000

Purchases Ledger Control Account b/f 8 000

31 Purchases Journal 12 000

Sales Journal 16 000

Returns inwards 1 000

Returns outwards 400

Payments to creditors 11 000

Receipts from customers 15 500

Customer’s cheque returned unpaid 500

Bad debts written off 300

Discount received 550

Discount allowed 750

Set-off 400

Credit balances in Sales ledger 600

Debit balances in Purchases ledger 200

QUESTION 5 (25 Marks)

T.Mverecha is a retailer whose trial balance at 31 December 1995 is as given below:

DR ($) CR ($)
Purchases and sales 72 000 119 400
Returns 750
Carriage inwards 930
Wages and salaries 27 670
General expenses 4 750
Bank 4 210
Petty cash 150
Premises 62 520
Fixtures and fittings 9 000
Stock at 1 January 1995 5 550
Debtors and creditors 7 200 4 850
Motor vehicles at cost 13 150
Provision for depreciation on motor vehicles – 1 January 1995 2 630
Capital at 1 January 1995 82 500
Drawings 3 000
210 130 210 130

The following additional information is available:

1. Stock at 31 December 1995 was valued at $5 200.

2. General expenses of $400 have been paid for the year 1996.
3. A debt of $200 is to be written as bad.
4. A provision is to be made for doubtful debts of 5% on debtors at 31 December 1995.
5. Depreciation is to be provided for 1995 as follows:
Fixtures and fittings at 10% using straight line method and motor vehicles at 20% using
reducing the reducing balance method.

REQUIRED:

Final accounts and a balance sheet as at 31 December 1995.

OCTOBER/NOVEMBER 2015

QUESTION 1 (25 Marks)

T.Moyo makes and sells electrical appliances. The following trial balance was extracted from his
books on 31 December 2011:

DR ($) CR ($)
Capital 260 000
Drawings 36 000
Sales 600 900
Stocks: 1 January 2011
-Raw materials 25 100
-Work in progress 10 000
-Finished goods 20 400
Purchases of raw materials 240 000
Direct wages 144 000
Office salaries 60 000
Customs duty 26 600
Patent fees 30 900
Factory power 40 000
insurance 38 000
Provision for bad debts 1 000
Plant and machinery at cost 120 000
Office equipment at cost 90 000
Provision for depreciation-plant and machinery 24 000
-office equipment 13 500
Bank 13 000
Debtors and creditors 18 000 12 600
912 000 912 000

Additional information:

i) Stock: raw materials $21 600 and finished goods $111 000.
ii) There was no closing stock of work in progress.
iii) Accrued direct wages totalled $6 000.
iv) Depreciation is provided as follows:
- Plant and machinery: 20% per annum using reducing balance method.
- Office equipment at 15% per annum on cost.
v) Insurance prepaid amounted to $3 000 and the insurance is to e apportioned as follows:
⅗ factory and ⅖ office.
vi) The provision for bad debts to e adjusted to 5% of debtors.

REQUIRED:

Prepare:
 a) The manufacturing, trading and profit and loss account for the year ended 31December
2011.
b) The balance sheet as at 31 December 2011.

QUESTION 2 (20 Marks)

The following balances and transactions were extracted from a company’s books:

Balance sheet at 1 May 2014 $

Sales ledger (debit) 9 123

(credit) 211

Purchases ledger (credit) 4 490

(debit) 88

Transactions during May 2014:

Credit purchases 18 135

Allowances from creditors 629

Receipts from debtors by cheque 27 370

Sales on credit 36 755

Discount received 1 105

Payments to creditors by cheque 15 413

Contra settlements 3 046

Allowances to debtors 1 720

Bills of exchange receivable 6 506

Debtors cheques dishonoured 489

Cash receipts from credit customers 4 201

Refunds to customers for overpayment of accounts 53

Discount allowed 732

Balances at 31 May 2014

Sales ledger (credit) 136

Purchases ledger (debit) 67

REQUIRED:

Prepare the Sales Ledger and Purchases Ledger Control Accounts for the month.

QUESTION 3 (20 Marks)

Roach and Salmon own a grocery shop. Their first financial year ended on 31 December 2013.
Balances on 31 December 2013 were:

ROACH ($) SALMON ($)

Capital 60 000 48 000

Salaries 9 000 6 000

Drawings 12 860 13 400

The firm’s net profit for the year was $32 840. Interest on capital and drawings is to be allowed at
10% per year.

Profits and losses are to be shared by Roach and Salmon in the ratio 5:4 respectively.

REQUIRED:

a) The firm’s appropriation account.

b) The partners’ current account in columnar form.

QUESTION 4 (20 Marks)

An inexperienced bookkeeper extracted a trial balance on 31 December 2011 which failed to agree.
The debit total was $29 480 and the credit total was $29 380. The difference was recorded in a
suspense account. Errors and omissions were later discovered and corrected.

a) Insurance was overstated by $190.

b) Sales day book was understated by $400.
c) Payment to Whatmore Bread $800 was not recorded in his account in the ledger.
d) Returns outwards of $300 to S.Cudo a creditor, was correctly entered in her account but no
other entry was made in the books.
e) The acquisition of a motor car from T.D.Duco for $360 was posted to the purchases account.
f) An expenses balance figure of $450 was omitted when extracting the trial balance.
g) A payment by Katau Philosopher of $130 was recorded on the wrong side of his account.
h) The discount on the credit side of the cashbook was posted to the debit side of the discount
allowed account.

REQUIRED:
 a) Journal entries to correct the above.
b) The suspense account.

QUESTION 5 (15 Marks)

T.Revayi received a bank statement for the month of May which showed an overdraft of $400. His
cashbook for the same period showed an overdraft of $69.

On comparing the bank statement and the cashbook he finds that:

a) Cheques amounting to $300 had not been presented to the bank for payment.
b) Deposits totalling $390 had not been credited by the bank.
c) A cheque of $89 to a creditor had been entered as $98 in the cashbook.
d) The following items appeared on the bank statement but not in the cashbook:
- Stop order for trade subscriptions $205
- Bank charges $ 25
- Dividends received $100
- Dishonoured cheques $120

REQUIRED:

Prepare on 31 May 1999:

i) An amended cashbook.
j) A bank reconciliation statement.
MARCH/APRIL 2016

QUESTION 1 (25 Marks)

The following trial balance was extracted from the books of Lindo at the close of business on 28
February 2014:

DR ($) CR ($)
Purchases and sales 11 280 19 740
Bank 1 140
Cash 210
Capital 9 900
Drawings 2 850
Office furniture 1 440
Rent 1 020
Wages and salaries 2 580
Discounts 690 360
Accounts receivable and payable 4 920 2 490
Inventory 2 970
Allowances for credit losses – 1/03/2013 270
Motor vehicles 2 400
Motor vehicles running costs 450
Credit losses 810
32 760 32 760

Notes:

a) Inventory at 28 February 2014 $3 510.

b) Wages and salaries accrued at 28 February 2014 $90.
c) Rent prepaid at 28 February 2014 $140.
d) Motor vehicle running costs owing at 28 February 2014 $60.
e) Provide for depreciation as follows:
- Office furniture $180.
- Motor vehicles $480.
f) Increase allowances for credit losses by $60.

REQUIRED:

Draw up a statement of comprehensive income for the year ending 28 February 2014 together with
a statement of financial position as at that date.
QUESTION 2 (20 Marks)

From the information given below, prepare the sales ledger and purchases ledger total control
accounts for the month of March 2015.

Debit balances in sales ledger 1.03.15 16 040

Credit balances in purchases ledger 1.03.15 2 100

Debit balances in purchases ledger 1.03.15 86

Credit balances in sales ledger 1.03.15 188

Total invoices from suppliers 20 000

Sales to credit customers 14 960

Cash sales 2 000

Total receipts from customers 8 000

Provision for bad debts 100

Discount allowed disallowed 24

Returns from credit customers 306

Returns to credit suppliers 288

Sales ledger balances transferred to purchases ledger 60

Irrecoverable debts cancelled 70

Discount allowed 144

Discount received 130

Cash paid to creditors 4 200

Interest charged by creditors on overdue accounts 20

Cash purchases 4 000

Credit balances in sales ledger 31.03.15 44

Debit balances in purchases ledger 31.03.15 76

QUESTION 3 (20 Marks)

Victor, Oscar and Kresto are in partnership sharing profits and losses in the ratio 3:2:1 respectively.

The net profit for the year ended 31 March 2014 amounted to $86 000. The partners’ drawings and
interest on drawings for the year were as follows:

DRAWINGS INTEREST
$ $
Victor 7 000 700
Oscar 6 000 600
Kresto 5 000 500

The partnership agreement further stated that:

i) Interest on capital to be allowed at 8% per annum.

ii) Victor and Oscar to receive salaries of $6 000 and $8 000 respectively.

Capital and current accounts balances on 1 April 2013 were as follows:

CAPITAL CURRENT
$ $
Victor 90 000 6 500 CR
Oscar 80 000 4 100 CR
Kresto 80 000 3 400 CR

You are required to:

a) Prepare the profit and loss appropriation account for the ended 31 March 2014.
b) Write up the current accounts in columnar form.

QUESTION 4 (20 Marks)

Marian has a debit balance on her suspense account of $1 529. She has now discovered the
following errors:

a) Payment for motor expenses of $350 was correctly recorded in the cash payments book but
was credited to the motor expenses account.
b) Payment for postage cost of $67 was correctly recorded in the cash payments book but was
entered into postage costs account as $76.
c) An invoice for $470 was omitted from the sales day book.
d) When the discount allowed account was balanced, the balance was under cast by $100.
e) Cleaning costs of $240 were included in the cash payments book but were not posted to the
cleaning costs account.
f) The balance on the miscellaneous expenses account of $498 was omitted from the trial
balance.
 REQUIRED:

i) Write journal entries to correct the above errors. No narrations are required.
ii) Draw up the suspense account.

QUESTION 5 (15 Marks)

From the following details draw up a bank reconciliation statement, starting with an amended cash
book on 30 November 2013:

1. Balance as per cash book $1 500.

2. Balance as per bank statement $915 Cr.
3. Cheques issued to Gats $190, Gabs $250 and Gava $350 had not been presented to the bank
for payment.
4. A cheque to one of the creditors should have a figure of $289 instead of $389.
5. Deposits not yet entered by the bank are cheques from:
- Anna $1 100.
- Thoko $280.
- Tsitsi $900.
6. Dividend received by bank and not yet entered in the cash book.
7. Bank charges $50.
8. Ledger fees $17.
9. Cheques written “refer to drawer” not entered in the cash book.
10. The bank debited business bank account in error instead of Zacks bank account with $382.
11. Credit transfer $90.
OCTOBER/NOVEMBER 2016

QUESTION 1 (25 Marks)

The following trial balance was extracted was extracted from the books of F.Mbemba.

TRIAL BALANCE AS AT 31 DECEMBER 2010

DR ($) CR ($)
Sales 40 445
Purchases 10 000
Sales returns 1 000
Carriage on purchases 1 000
Inventory at 1 January 2010 6 040
Provision for doubtful debts 330
Carriage on sales 2 100
Rates 200
Administration expenses 5 070
Salaries and wages 4 030
Loan interest 600
Motor vehicles at cost 20 000
Buildings at cost (100 000) 60 000
Provision for depreciation – motor vehicles 4 900
Accounts receivable 14 000
Accounts payable 5 900
Loan from Caston 6 000
Bank 4 620
Drawings 6 050
Capital 67 895
130 090 130 090

Additional information:

a) Inventory on 31 December 2010 $4 210.

b) Expenses outstanding: admin expenses $200.
c) Prepaid rates $50.
d) Wages owing $200.
e) Reduce the provision for doubtful debts to $300.
f) Depreciate motor vehicles at 10% on cost and buildings at 15% on the reducing balance
basis.

REQUIRED:

i) Draw up a statement of comprehensive income for F.Mbemba for the year ended 31
December 2010.
ii) A statement of financial position as at 31 December 2010.
QUESTION 2 (20 Marks)

Makanaka and Tatenda are in partnership sharing profits and losses in the ratio 2:3. Their
partnership agreement provides the following:

a) Interest to be charged on drawings at the rate of 5% p.a.

b) Capital account balances to earn 12% interest.
c) Salary of $3 000 for Tatenda is to be charged.

The net profit of the business for 2015 was $22 000.

The following information was taken from their books on 31 December 2015:

General expenses 2 000

Marketing and distribution expenses 4 000

Capital-Makanaka 25 000

-Tatenda 10 000

Current accounts-Makanaka 8 000

-Tatenda 5 000

Drawings-Makanaka 7 000

-Tatenda 4 000

REQUIRED:

i) Prepare the profit and loss appropriation account for the partnership business.
ii) The current accounts of the partners.

QUESTION 3 (15 Marks)

The following is a summary of D.Dube’s cashbook (bank columns only) for the month of September
1998:

BANK ACCOUNT

Balance b/d 1 020 Payments 15 684

Receipts 18 912 Balance c/d 3 248
19 932 19 932
Balance b/d 3 248
The cash book balance is different from that on the bank statement for the same month.
Investigations revealed the following discrepancies:

1. Cheques drawn amounting to $1 670 had not been presented to the bank for payment.
2. Cash and cheques totalling $2 520 has been paid into the bank on 30 September, but were
not credited by the bank until the following day.
3. Bank charges of $155 shown on the bank statement had not been entered in the cash book.
4. A cheque of $1 198 received from a customer OC had been returned by the bank marked
“Refer to Drawer”, no adjustment have been made in the cash book.
5. The bank credited (in error) Dube’s account with a deposit of $500 made by another
customer T.Dube.
6. A cheque payment of $510 to a supplier F.Wilson had been recorded in the cash book as a
receipt.
7. The balance carried forward $3 248 in the cash book summary is incorrect.

REQUIRED:

Prepare a supplementary cash book showing the updated cash book balance and prepare a bank
reconciliation statement as at 30 September 1998.

QUESTION 4 (20 Marks)

The financial year of Manyere Trading Company ended on 30 June 2014. You have been asked to
prepare a Total Debtors Account and a Total Creditors Account in order to produce end of year
figures for debtors and creditors for the draft final accounts.

You are able to obtain the following for the financial year from the books of original entry:

Sales-cash 344 890

-credit 268 187

Purchases-cash 14 440

-credit 496 600

Total receipts from customers 600 570

Total payments to suppliers 503 970

Discount allowed 5 520

Discount received 3 510

Refunds given to cash customers 5 070

Set off 70

Bad debts written off 780

Increase in provision for bad debts 90

Returns inwards 4 140

Returns outwards 1 480

According to the audited financial statements for the previous year, debtors and creditors as at 1
July 2013 were $26 555 and $43 450 respectively.

REQUIRED:

Draw up the relevant total accounts entering end of year totals for debtors and creditors.

QUESTION 5 (20 Marks)

The trial balance of A.Moyo on 31 December 2014 failed to agree by $600 a shortage of the credit
side. A suspense account was opened for the difference.

During 2015 the following errors made in 2014 were located:

a) Rent was under cast by $1 000.

b) Purchase of a motor van $2 000 had been debited to the purchases account.
c) Insurance account was over stated by $200.
d) Commission received $250 had been completely omitted from the books.
e) Goods returned to K.Fox (creditor) $800 was correctly entered in his account but no other
entry was made.
f) Discount received $150 had been entered on the debit side of the discount allowed account.
g) Cash received from a debtor $300 was entered in the cash book only.

REQUIRED:

1. Show requisite journal entries to correct the errors.

2. Write up the suspense account showing the correction of errors.
MARCH/APRIL 2017

QUESTION 1 (25 Marks)

From the following trial balance of Charles Chagonda, a store owner, prepare a statement of
comprehensive income for the year ended 31 December 2015 and a statement of financial position
as at that date, taking into consideration the adjustments shown below:

TRIAL BALANCE AS AT 31 DECEMBER 2015

DR ($) CR ($)
Purchases and sales 350 000 400 000
Returns 5 000 6 200
Opening stock 100 000
Provision for doubtful debts 800
Wages and salaries 30 000
Rates 6 000
Telephone 1 000
Shop fittings at cost 40 000
Van at cost 30 000
Debtors and creditors 9 800 7 000
Bad debts 200
Capital 179 000
Bank 3 000
Drawings 18 000
593 000 593 000

i. Closing stock at 31 December 2015 $120 000.

ii. Accrued wages $5 000.
iii. Rates prepaid $500.
iv. Provision for doubtful debts to be increased to 10% of debtors.
v. Telephone account outstanding $220.
vi. Depreciate shop fittings at 10% per annum on cost and van at 20% per annum on
cost.

QUESTION 2 (20 Marks)

The following information relates to Mubaiwa Manufacturers a concern that manufactures cleaning
detergents. The year end was at 30 September 2011.

$
Inventory on 1 October 2010
- Raw materials 8 350
- Work in progress 10 200
- Finished goods 12 800
Sale of finished goods 285 820
 Purchases of raw materials 38 450
Carriage on raw materials 3 330
Royalties 7 500
Factory wages 36 500
Factory insurance 4 600
Purchases of finished goods 10 000
Plant and machinery at cost 58 000
Provision for depreciation – plant and machinery 9 000
Rent and rates (¾ factory) 24 000
Electricity (⅔ factory) 16 500
Inventory on 30 September 2011
- Raw materials 6 500
- Work in progress 11 500
- Finished goods 9 400

Additional information available:

a) Rent and rates prepaid $6 000.

b) Electricity owing $1 500.
c) Depreciation on plant and machinery to be charged at the rate of 12% per annum using the
reducing balance method.

REQUIRED:

The manufacturing and trading account for the period ended 30September 2011.

QUESTION 3 (20 Marks)

The following information relates to the partnership of Tapiwa and Tawana as at 31 December 2014.

$
Net profit 84 800
Interest on capital: Tapiwa 3 600
Tawana 2 700
Interest on drawings: Tapiwa 1 200
Tawana 960
Salaries : Tapiwa 11 000
Tawana 15 000
Profit and loss sharing ratio: Tapiwa 55%
Tawana 45 %
Current accounts balances: Tapiwa 15 000cr
Tawana 8 000dr
Capital accounts: Tapiwa 60 000
Tawana 50 000
Drawings: Tapiwa 10 200
Tawana 7 800
You are required to:

a) Prepare a profit and loss appropriation account for the year ended 31 December 2014.
b) Write up the capital accounts in columnar form.
c) Write up the current accounts in columnar form.
d) Statement of financial position extract.

QUESTION 4 (15 Marks)

The following are extracts from the cashbook and the bank statement of Chipanda:

CASHBOOK

2014 DETAILS $ 2014 DETAILS $

DEC DEC
1 Balance b/d 3 419 8 B.Young 462
7 F.Land 101 15 F.Gray 21
22 G.Brock 44 28 T.Errant 209
30 W.Terry 319
31 S.Miller 246 31 Balance c/d 3 437
4 129 4 129
2015
JAN
1 Balance b/d 3 437

BANK STATEMENT

DATE DETAILS DR CR BALANCE$

2014
Dec 1 Balance b/d 3 419
7 Cheque 101 3 520
11 B.Young 462 3 058
20 F.Gray 21 3 037
21 Cheque 44 3 081
30 Credit transfer: T.Morris 93 3 174
31 Bank charges 47 3 127

REQUIRED:

a) Write the cashbook up to date shoeing the new balance as on 31 December 2014.
b) Draw up a bank reconciliation statement as at 31 December 2014.
QUESTION 5 (20 Marks)

A trial balance failed to agree and a suspense account was opened for the difference.

The following errors were subsequently discovered in the books:

i. The purchases day book had been under cast by $10.

ii. Goods bought on credit from M.Mugove for $5 had been posted to his account as
$50.
iii. A new machine costing $70 had been posted to the debit of the repairs to machinery
account.
iv. O.Mufamba a customer returned goods valued at $10. This has been entered in the
sales returns day book and posted to the debit of the customer’s account.
v. The sale on credit of various items of plant and machinery at their book value of
$300 had been recorded in the sales day book.
vi. $60 owed by D. Moyo, a customer had been overlooked when drawing up a
schedule of sundry debtors from the ledger.
vii. Discount allowed $2 had been correctly entered in the cashbook but had not been
posted to the account of B.Sibanda, the customer.

REQUIRED:

a) Write up the journal entries necessary to correct the above errors.

b) The suspense account.
OCTOBER/NOVEMBER 2017

QUESTION 1 (25 Marks)

The following is a trial balance of Mr.Jay Enry, a sole trader, in the business as a general dealer at
Kayara Business Centre in Mberengwa. His year ends on 31 December 2015.

TRIAL BALANCE AS AT 31 DECEMBER 2015

$ $
Capital 45 000
Buildings 40 000
Motor vehicles at cost 15 000
Provision for depreciation-buildings 4 000
-motor vehicles 2 000
Purchases and sales 153 500 241 000
Lighting and heating 2 500
Rates 2 300
Bad debts 9 00
Provision for doubtful debts 1 000
Insurance 1 500
Returns 1 800 1 500
Debtors and creditors 30 000 14 600
Bank 4 800
Inventory at 1.1.15 40 000
Salaries and wages 22 800
Drawings 10 000
Loan from CABS 5 900
320 300 320 300

The following notes should be taken into account:

a) Inventory on 31 December 2015 was valued at $30 700.

b) Lighting and heating expenses accrued at 31 December 2015 was $150 and wages and
salaries accrued $1 500.
c) Insurance costs were prepaid by $350.
d) Create an allowance for doubtful debts of 2½% of debtors at 31 December 2015.
e) Depreciate non- current assets as follows:
- Motor vehicles, 20% on reducing balance method.
- Buildings 10% on straight line method.
f) Loan interest $295 was due on 31 December 2015.

REQUIRED:

a) Statement of comprehensive income for the year ending 31 December 2015.

b) Statement of financial position as at 31 December 2015.
QUESTION 2 (20 Marks)

The following balances were taken from the books of Cee Jay. They relate to the month of
November 2013

1 November 2013: $

Debtors 29 630 DR

Debtors 220 CR

Creditors 640 DR

Creditors 17 500 CR

Information from the books of accounts in the form of day books were as follows:

Cash book

- Cash sales 84 900

- Cash purchases 49 750
- Discount allowed 1 100
- Discount received 4 800
- Receipts from debtors 102 460
- Payments to creditors 69 750
- Debtors cheques dishonoured 7 200

Sales day book 230 600

Purchases day book 173 400

Returns inwards journal 2 400

Returns outwards journal 5 500

Bad debts written off 600

Bills payable accepted 6 500

Bills receivable accepted 9 000

Debit balances in debtors ledger set off against credit

balances in creditors ledger 3 300

30 November 2013

Debtors ledger balances 160 CR

Creditors ledger balances 40 DR

REQUIRED:

Pepare a debtors ledger control account and a creditors ledger control account balanced off as at
November 30, 2013.

QUESTION 3 (20 Marks)

Rerai and Revai own a hair care shop in the CBD of Gweru. Their year end financial records on 31
December 2015 showed the following:

RERAI REVAI

$ $

Capital 80 000 60 000

Salaries 12 000 10 000

Drawings 10 500 14 400

Current accounts-1/01/2015 3 000 DR 2 000 CR

The firm’s net profit for the year 2015 was $56 840. Interest on capital was agreed at 10% per
annum while 8% was charged on drawings. It was also established that Revai had taken goods from
the shop for personal use, not recorded in the books at all worth $600.

The partnership agreement allows the partners to share profits and losses in the ratio 3:2
respectively.

REQUIRED:

a) Prepare the firm’s appropriation account for the year ended 31 December 2015.
b) Prepare the partners’ current accounts in columnar form.

QUESTION 4 (20 Marks)

The following information relates to the toy manufacturing business of Jekanyika as at 31 December
2015.

Factory plant (cost $20 000) 12 000

Office furniture (cost $5 000) 3 800

Stocks/inventory (1 January 2015)

 - Raw materials 4 600
- Work in progress 2 400
- Finished goods 8 000

Raw materials purchased 45 000

Sales 75 000

Manufacturing wages 7 300

Carriage on raw materials 2 200

Rent and rates 8 400

Sundry expenses 2 000

Electricity 4 800

Creditors 5 900

Debtors 6 000

Cash 200

Provision for bad debts 800

NOTES:

i. The following expenses are to be apportioned as follows : ¾ factory and ¼ office:

rent and rates; sundry expenses; electricity.
ii. Depreciation is charged as follows: Factory plant 20% per annum and office furniture
10% per annum using straight line method.
iii. Inventory/stocks at 31 December 2015: raw materials $5 800; work in progress
$3 550; finished goods $15 400.

REQUIRED:

a) The manufacturing account for the year ended 31 December 2015.

b) The trading account for the year ended 31 December 2015.
QUESTION 5 (15 Marks)

Kuzamba Ltd extracted a trial balance on 31 January 2016 which failed to agree by $28 940, a
shortage on the debit side of the trial balance. A suspense account was opened for the difference. In
February 2016, the following errors were found:

i. The telephone account had been under cast by $1 000.

ii. A cheque paid to Rainbow Agencies for $1 340 had been posted to the credit side of his
account.
iii. Discount received of $630 had been posted to the debit side of the discount allowed
account.
iv. Commission paid of $12 000 had been posted to the credit of the commission received
account.
v. Goods returned by Mashiri (debtor) of $840 had not been recorded in the books of
accounts.

REQUIRED:

a) Prepare the journal entries required to correct these errors. Narratives are not required.
b) Prepare the suspense account.
MARCH/APRIL 2018

QUESTION 1 (25 Marks)

The following trial balance was extracted from the books of M.Moses, a retailer in general goods.

TRIAL BALANCE AS AT 30 JUNE 2016

$ $
Purchases and sales 92 800 157 185
Cash at bank 4 100
Cash in hand 7 324
Capital 11 400
Drawings 10 100
Rent 3 400
Salaries and wages 31 400
Office furniture 2 900
Discounts 820 160
Debtors and creditors 12 316 5 245
Stock 1 July 2015 4 100
Provision for doubtful debts 405
Delivery van 3 790
Motor expenses 615
Bad debts 730
174 395 174 395

Additional information to be taken into account:

a) Stock at 30 June 2016 $2 400.

b) Wages not yet paid by 30 June 2016 $340.
c) Rent was paid in advance by 30 June 2016 $230.
d) $72 for motor expenses had not been paid by 30 June 2016.
e) Provision for doubtful debts to be increased to $555.
f) It was decided to provide depreciation as follows: office furniture 15% and delivery van 20%
on cost.

REQUIRED:

Prepare a statement of comprehensive income for the year ended 30 June 2016 and a statement of
financial position as at that date.
QUESTION 2 (20 Marks)

The following list of balances was extracted from the books of Mary Ndanga who commenced
business on 1 January 2015 as a designer and manufacturer of kitchen furniture:

$
Plant and machinery at cost 60 000
Motor vehicles at cost 30 000
Loose tools at cost 9 000
Sales 170 000
Raw materials purchased 43 000
Direct factory wages 39 000
Light and power 5 000
Indirect factory wages 8 000
Machinery repairs 1 600
Motor vehicle running expenses 12 000
Rent and insurance 11 600
Administrative staff salaries 31 000
Administrative expenses 9 000
Sales and distribution staff salaries 13 000
Capital at 1 January 2015 122 000
Accounts receivable 16 500
Accounts payable 11 200
Bank balance 8 500
Drawings 6 000

Additional information for the year ended 31 December 2015:

a) Depreciation: plant and machinery $600 and motor vehicles $7 500.

b) Light and power charges accrued $1 000 and insurance prepaid $800.
c) Stocks were valued at cost at 31 December 2015 as follows:
- Raw materials $7 000.
- Work in progress $12 300.
- Finished goods $10 000.
d) Light and power ⅔ factory and ⅓ office.
e) Insurance ⅔ factory and ⅓ office and motor vehicle running expenses 50% factory and 50%
office.
f) Loose tools written off $4 000.

REQUIRED:

Prepare a manufacturing account and a statement of comprehensive income for the year ended 31
December 2015.
QUESTION 3 (20 Marks)

Jackson and Mackson are in partnership sharing profits and losses in the ratio 3:2 respectively.

The following trial balance was extracted from their books as at 31 December 2015:

DR ($) CR ($)
Capital-Jackson 15 000
-Mackson 12 000
Current account-Jackson 1 000
-Mackson 1 500
Drawings-Jackson 4 500
-Mackson 3 400
Purchases and sales 43 000 80 000
Carriage inwards 1 600
Salaries and wages 12 900
General expenses 800
Rent and rates 3 500
Discounts 1 200 900
Returns 300 200
Motor vehicles 30 000
Furniture and fittings 12 000
Provision for depreciation – motor vehicles 12 000
Provision for depreciation – furniture 3 200
Stock 8 600
Debtors and creditors 6 700 4 000
Provision for bad debts 400
Bank 1 300
130 000 130 000

Additional notes:

a) Closing stock $9 000.

b) Rates paid in advance $300.
c) $200 was owing for general expenses.
d) Depreciate motor vehicles at 20% and furniture at 10% per annum using the straight line
method.
e) Provision for bad debts to be adjusted to $300.
f) Jackson is entitled to an annual salary of $3 000.
g) Interest on capital is at an annual rate of 10%.
h) Interest on drawings: Jackson $150 and Mackson $100.

REQUIRED:

Prepare a statement of comprehensive income and appropriation account for the year ended 31
December 2015
QUESTION 4 (15 Marks)

On 31 December 2014 the bank column of Jethro Nyarota’s cash book showed a debit balance of
$1 500. The monthly bank statement written up to 31 December 2014 showed a credit balance of
$2 950. On checking the cash book with the bank statement, it was discovered that the following
transactions had not been entered in the cash book.

a) Dividends of $240 had been paid directly to the bank.

b) A credit transfer from Patsanza of $260 had been collected by the bank.
c) Bank charges $30.
d) A direct debit of $70 for Kwekwe Sports Club subscription had been paid by the bank.
e) A standing order of $200 for Jethro Nyarota’s loan repayment had been paid by the bank.
f) A sum of $1 400 was directly credited to Jethro’s account.
g) A further check revealed the following:
- Two cheques drawn in favour of C.Moyo $250 and D.Ncube $290 had been entered
in the cash book but had not been presented for payment.
- Cash and cheques amounting to $690 had been paid into the the bank on 31
December 2014 but were not credited by the bank until 2 January 2015.

REQUIRED:

Prepare a supplementary cash book and a bank reconciliation statement as at 31 December 2014.

QUESTION 5 (20 Marks)

The following information was obtained from the books of Sam Choto:

1 April 2016

Debtors balance 7 190 DR

Debtors balance 200 CR

Creditors balance 4 120 CR

Creditors balance 300 DR

30 April 2016

Credit sales 46 300

Credit purchases 29 900

Cash sales 14 360

Cash purchases 9 750

Sales returns 1 070

Purchases returns 940

Cheques received from debtors 38 900

Cheques paid to creditors 28 100

Discount allowed 1 060

Discount received 760

Set off 90

Interest charged to customers on overdue accounts 20

Refund received from a creditor in respect of overpayment 50

Debtors balance 100 CR

Creditors balance 150 DR

REQUIRED:

Prepare the sales ledger and purchases ledger control accounts for the month of April 2016.
OCTOBER/NOVEMBER 2018

QUESTION 1 (25 Marks)

The following is the trial balance for Bongani, a sole trader, as at 31 December 2014:

DR ($) CR ($)
Sales 67 000
Purchases 42 600
Lighting and heating 1 900
Rent 2 400
Wages: shop assistant 5 200
Carriage outwards 1 100
General expenses 700
Buildings 20 000
Fixtures and fittings 7 500
Debtors and creditors 12 000 9 000
Bank 1 200
Cash 400
Drawings 9 000
Capital 31 000
Stock 3 000
107 000 107 000

Additional information:

i. Stock at 31 December 2014 $5 500.

ii. Prepared wages $400.
iii. General expenses due amounted to $150.
iv. Depreciation of fixtures and fittings amounted to $400.

REQUIRED:

a) Statement of comprehensive income for the year ending 31 December 2014.

b) Statement of financial position as at 31 December 2014.

QUESTION2 (20 Marks)

Oscar and Obert are in partnership sharing profits and losses in the ratio 3:2 respectively. The
following trial balance was extracted from the books on 30 September 2007.

TRIAL BALANCE AS AT 30 SEPTEMBER 2007

DR ($) CR ($)
Purchases and sales 119 600 227 300
Wages and salaries 34 380
Rent, rates and insurance 17 660
General expenses 21 350
Land and buildings at cost 52 100
Fixtures and fittings at cost 21 500
 Provision for depreciation – fixtures and fittings 13 900
Debtors and creditors 18 500 9 140
Stock at 1 October 2006 10 300
Cash at bank 2 480
Capital-Oscar 33 000
-Obert 21 000
Current accounts-Oscar 14 300
-Obert 12 600
Drawings-Oscar 17 130
-Obert 16 240 -
331 240 331 240

Additional information:

1. Stock at 30 September 2007 was valued at $9 900.

2. Wages and salaries accrued $3 530.
3. Insurance prepaid $1 120.
4. An invoice for $1 620 for goods bought on credit during the month of September 2007 was
not recorded in the books of accounts.
5. Depreciate fixtures and fittings at 20% per annum on cost.
6. Create a 3% provision for doubtful debts as at 30 September 2007.

REQUIRED:

Statement of comprehensive income for the year ended 30 September 2007 and a statement of
financial position as at that date.

QUESTION 3 (15 Marks)

The following information was extracted from the books of K.Smith and Sons:

a) The balance in the cash book on 31 December 2015 was $3 091.

b) A cheque drawn in favour of Tanaka $215 had not been presented for payment.
c) Deposits amounting to $457 had not been credited by the bank.
d) The bank statement for the month of December showed the following items which were not
in the cash book:
- T.Green: credit transfer $54.
- Bank charges $22.
- Dividends received $150.
- Interest charged $410.

REQUIRED:

An updated cash book and a bank reconciliation as at 31 December 2015.

QUESTION 4 (20 Marks)

OBC Investment Ltd has the following information for the year to 31 December 2015:

Stocks on 1 January 2015:

- Raw materials 90 000

- Work in progress 75 000
- Finished goods 100 000

Stocks on 31 December 2015:

- Raw materials 77 500

- Work in progress 92 500
- Finished goods 125 000

Transactions for the year:

Raw materials purchased 750 000

Carriage on raw materials 75 000

Indirect labour 100 000

Telephone 25 000

Power 65 000

Repairs and maintenance 35 000

Direct factory wages 300 000

Factory foreman’s wages 70 000

General expenses 40 000

Office salaries 50 000

Returns of raw materials 17 500

Rent and rates 55 000

Sales 3 000 000

Factory machinery: Depreciation 28 000

Insurance 22 500

NOTES:
 a) Telephone, insurance, general expenses, rent and rates are to be shared 3:1 for factory and
office respectively.
b) Insurance prepaid $1 500.

You are required to prepare a manufacturing and trading account for the year ended 31 December
2015.

NB: Profit and loss account and balance sheet are not required.

QUESTION 5 (25 Marks)

The following information was extracted from the books of Gambiza Stores:

Balance as at 1/12/15

Sales ledger 5 200 DR

600 CR

Purchases ledger 7 700 CR

Transactions and closing balances for the month of December 2015

Credit purchases 9 400

Credit sales 8 000

Cash sales 3 000

Cheques paid to creditors 10 500

Cash and cheques received from debtors 7 500

Bad debts written off 120

Discount allowed 350

Discount received 320

Set off 180

Returns inwards 1 500

Returns outwards 2 500

Provision for bad debts 170

Dishonoured cheques from debtors 1 000

Refunds received from suppliers 100

Interest on debtors overdue accounts 800

Credit balances in debtors ledger 150

Debit balances in creditors 300

REQUIRED:

A sales ledger control account and purchases ledger control account for the month of December
2015.
MARCH/APRIL 2019

QUESTION 1 (25Marks)

The following balances were extracted from the books of Morgan, a sole trader, on 331 December
2012:

DR ($) CR ($)
Purchases and sales 86 400 140 280
Returns 750 900
Carriage inwards 1 120
Carriage outwards 870
Wages and salaries 33 200
General expenses 5 700
Bad debts 800
Cash at bank 5 050
Petty cash 180
Premises 74 950
Fixtures and fittings 10 800
Inventory at 1 January 2012 6 560
Accounts receivable 8 620
Accounts payable 5 830
Provision for depreciation – fixtures and fittings 4 320
Capital 86 790
Drawings 3 600
Provision for bad debts 480
238 600 238 600

The following additional information is also available:

a) Stock at 31 December 2012 was valued at $4 800.

b) Wages and salaries prepaid $500.
c) General expenses owing $600.
d) Additional bad debts to be written off $100.
e) Provision for bad debts to be reduced by $120.
f) Depreciate fixtures and fittings at 10% using the reducing balance method.

REQUIRED:

i. A statement of comprehensive income for the year ended 31 December 2012.

ii. A statement of financial position as at 31 December 2012.
QUESTION 2 (20 Marks)

Father, Son and Daughter are in partnership business under the name Batanai Partnership. Their
partnership agreement provides the following:

i. Interest on capital 5% per annum.

ii. Interest on drawings 10% p.a.
iii. Son and Daughter are to be awarded salaries of $1 000 and $800 respectively.
iv. Son is to be given a bonus of $1 200.
v. Profits and losses are to be shared in the ratio 3:3:4 respectively.

During the year ended 30 June 2015, the partnership net profit was $21 000.

Capital account balances: $

- Father 30 000
- Son 30 000
- Daughter 40 000

Current account balances:

- Father 1 000 CR
- Son 2 000 CR
- Daughter 3 000 CR

Drawings:

- Father 2 000
- Son 1 500
- Daughter 2 000

Required to prepare:

a) Appropriation account for the year ended 30.06.2015.

b) Current accounts for the partnership in columnar form.
c) Balance sheet extract as at 30/06/2015.

QUESTION 3 (20 Marks)

The following information relates to R.Tendai:

On 31 December 2006, the bank column of the cash book showed a debit balance of $3 000.

The monthly bank statement written up to 31 December 2006 showed a credit balance of $5 900.

On checking the cash book with the bank statement, it was discovered that the following
transactions had not been entered into the cash book.

i. Dividends of $480 had been paid directly to the bank.

 ii. A credit transfer – ZIMRA VAT refund of $520 had been collected by the bank.
iii. Bank charges $60.
iv. A direct debit of $140 for Harare Sports Club subscription had been paid by the
bank.
v. A standing order of $400 for R.Tendai’s loan repayment had been paid by the bank.
vi. R.Tendai’s deposit account balance of $2 800 was transferred into his current
account.
vii. Two cheques drawn in favour of T.Ruvai $500 and F.Hauda $580 had been entered
in the cash book but had not been presented for payment.
viii. Cash and cheques amounting to $1 380 had been paid into the bank on 31
December 2006 but were not credited by the bank until 2 January 2007.

REQUIRED:

a) Starting with a debit balance of $3 000 bring the cash book up to date and then balance
the bank account.
b) Prepare a bank reconciliation statement as at 31 December 2006.

QUESTION 4 (20 Marks)

You are required to prepare manufacturing and trading accounts for Miller for the year ended 31
December 2013 from the following information:

Inventory at 1 January 2013:

- Raw materials 25 400

- Work in progress 31 100
- Finished goods 23 260

Inventory at 31 December 2013:

- Raw materials 28 900

- Work in progress 24 600
- Finished goods 28 840

Transactions for the year:

Purchases – raw materials 91 535

Carriage on raw materials 1 960

Direct labour 44 208

Office salaries 33 419

Rent 15 200

Lighting and heating 14 420

Depreciation – works machinery 10 200

Depreciation – office equipment 2 300

Sales 278 622

Factory fuel and power 8 120

Purchases of finished goods 5 800

NOTES:

a) Rent to be apportioned: factory ¾ and office ¼.

b) Lighting and heating to be apportioned: factory ⅗ and office ⅖.

QUESTION 5 (15 Marks)

S.Sonondo extracted a trial balance on 30 June 2015 which failed to agree by $470 a shortage on the
debit side. A suspense account was opened for the difference. The following errors were
subsequently discovered:

i) The purchases day book was under cast by $100.

ii) No entries were made in the books in respect of goods valued at $250 returned to J. Cook
Supplies Ltd.

iii) The provision for bad debts account balance was calculated as $265 instead of $255.
iv) The total discount allowed at $360 in the cash book was not posted to the ledger.
v) A cheque payment of $200 for Sonondo’s private electricity bill was posted to the
business electricity account.

REQUIRED:

a) Draft journal entries to correct the above errors (narrations not required)
b) Prepare the suspense account.
OCTOBER/NOVEMBER 2019

QUESTION 1 (25 Marks)

The following trial balance was extracted from the books of F.Wasara at 30 June 2018:

TRIAL BALANCE AS AT 30 JUNE 2018

DR $ CR$
Land and buildings at cost 16 000
Fixtures and fittings at cost 4 000
Provision for depreciation – fixtures and fitting 1 600
Cash in hand 50
Cash at bank 2 164
Inventory at 1 July 2017 14 864
Purchases and sales 116 230 164 720
Returns 1 330 1 910
Accounts receivable 12 210
Accounts payable 11 694
Drawings 11 200
Salaries 18 360
Lighting and heating 1 510
Rent and insurance 2 600
Discounts 1 220 816
Capital 21 800
Sundry expenses 802
202 540 202 540

Additional information:

a) Inventory at 30 June 2018 $10 280.

b) Salaries owing $240.
c) Insurance prepaid $600.
d) Fixtures and fittings are to be depreciated at 10% per annum using the reducing balance
method.
e) Land and buildings are to depreciated at 10% per annum using straight line method.
f) Create 5% provision for doubtful debts.

REQUIRED:

A statement of comprehensive income for the year ended 30 June 2018 a statement of financial
position as at that date.

QUESTION 2 (15 Marks)

D.Sadza’s cash book showed a bank overdraft on 31 December 2017 of $1 290, but the bank
statement showed an overdraft of $620.

On comparing the cash book with the bank statement, the following discrepancies were unearthed.

i. An amount of $2 740 paid into the bank had not yet appeared in the bank statement.
ii. Cheques amounting to $1 720 issued to creditors had not been presented to the bank
for payment.
iii. A cheque for $420 received from G.Manyawi which had been deposited into the bank
had been returned marked “Refer to Drawer”. No action had been by D.Sadza to deal
this item.
iv. The bank had received a credit transfer (bank giro) $180 due to Sadza from T and M
consultants.
v. Cash deposited into the bank amounting to $780 had been recorded in the cash book as
is it was cash withdrawn from the bank for office use.
vi. The following charges raised by the bank had not been recorded in the cash book.
vii. The bank had credited D Sadza account with $640 in error.

REQUIRED:

a) An updated cash book.

b) A correctly headed statement to reconcile the adjusted cash book balance with the bank
statement balance.

QUESTION 3 (20 Marks)

Richmond is a manufacturer, his trial balance is as follows as at 31 December 2014:

DR ($) CR ($)
Delivery van expenses 1 760
Lighting and heating-factory 7 220
-office 1 490
Manufacturing wages 72 100
General expenses-factory 8 100
-office 1 940
Salesman’s commission 11 688
Purchases of raw materials 57 210
Rent-factory 6 100
-office 2 700
Machinery (cost $40 000) 28 600
Office equipment (cost $9 000) 8 200
Office salaries 17 740
Accounts receivable 34 200
Accounts payable 9 400
Bank 16 142
Sales 194 800
Van (cost $6 800) 6 200
Inventory at 1 January 2014:
 - Raw materials 13 260
- Finished goods 41 300
Drawings 24 200
Capital - 155 950
360 150 360 150

Additional notes:

i. Inventory in hand at 31 December 2014:

- Raw materials $14 510.
- Finished goods $44 490.
- No work in progress
ii. Depreciate-machinery $3 000.
-office equipment $600.
-van $1 200.

iii. Manufacturing wages owing $550 and office rent prepaid $140.

REQUIRED:

Prepare the manufacturing account and income statement for the year ended 31 December 2014.

QUESTION 4 (20 Marks)

Tapiwa and Hazel are partners, in a retail business, sharing profits and losses equally. The following
balances were extracted from their books at 31 March 2014:

DR ($) CR ($)
Capital accounts 1 April 2013
- Tapiwa 6 000
- Hazel 3 000
Current accounts 1 April 2013
- Tapiwa 3 000
- Hazel 4 500
Drawings-Tapiwa 600
-Hazel 900
Partners salaries-Tapiwa 7 500
-Hazel 10 500
Fittings at cost 15 000
Provision for depreciation – fittings 5 250
Vehicles at cost 11 250
Provision for depreciation – vehicles 3 750
Stock 1 April 2013 4 950
Debtors and creditors 1 650 1 320
Cash at bank 1 920
Purchases and sales 36 750 78 000

Wages 3 300
 Rent and rates 9 300
Heating and lighting 1 200 -
104 820 104 820

The following matters are to be taken into account:

a) Stock at 31 March 2014 was $4 050.

b) Rent of $750 has been paid in advance.
c) Depreciation: fittings at 10% and vehicles at 20% both on cost.
d) Interest on capital allowed at 5% p.a.

REQUIRED:

i. Prepare a statement of comprehensive income including the appropriation account.

ii. The current accounts in columnar form.

QUESTION 5 (20 Marks)

Mr.M Ncube extracted a trial balance on 28 February. Credits exceeded debits by $500 and the
amount was placed in a suspense account.

Subsequently the following errors were discovered:

a) The cost of repairing buildings $1 300 had been debited to premises account.
b) The sales journal had been overcast by $600.
c) The interest earned amounting to $150 had been debited to the interest paid account.
d) Bank charges of $200 were only credited to the bank account in the cash book.
e) A sale of goods on credit to A Adams for $900 had not been recorded in the books.
f) The provision for depreciation – equipment $120 was not recorded in the books of accounts.
g) John’s account was debited with $500 instead of Jones account.

REQUIRED:

i. Prepare journal entries to correct the errors (narrations are not required).
ii. Prepare the suspense account.

MARCH/APRIL 2020
QUESTION 1 (25 Marks)

The following trial balance was extracted from the books of Kura K at close of business as on 28
February 2017:

DR ($) CR ($)
Cash in hand 324
Purchases and sales 92 800 157 165
Cash at bank 4 100
Capital 1 March 2016 11 400
Drawings 17 100
Office furniture 2 900
Rent 3 400
Wages and salaries 31 400
Discounts 820 160
Accounts receivable 12 316
Accounts payable 5 245
Inventory 1 March 2016 4 120
Allowance for doubtful debts 1 March 2016 405
Delivery van 3 750
Van running costs 615
Bad debts 730
174 375 174 375

Additional information:

a) Inventory 28 February 2017 $2 400.

b) Wages and salaries accrued at 28 February 2017 $340.
c) Rent prepaid at 28 February 2017 $230.
d) Van running costs owing at 28 February 2017 $72.
e) Increase the allowance for doubtful debts by $91.
f) Provide for depreciation as follows: office furniture $380 and delivery van $1 250.

REQUIRED:

Draw up the statement of comprehensive income for the year ended 28 February 2017, together
with the statement of financial position as at that date.

QUESTION 2 (20 Marks)

J Moyo owns a small manufacturing business. In addition to the goods made by the firm, Moyo buys
finished goods to increase the product range.

The following were taken from the books on 31 December 2016:

Inventory 1 January 2016 $

- Raw materials 5 300
- Finished goods 18 700
Inventory 31 December 2016
- Raw materials 14 100
- Finished goods 19 600
Bad debts 400
Factory wages 66 000
Factory overheads 19 900
Carriage on sales 2 800
Purchases of raw materials 175 200
Depreciation on factory equipment 9 300
Carriage on raw materials 2 100
Purchase of finished goods 45 100
Office expenses 5 800
Factory direct expenses 2 700
Sale of finished goods 445 100

REQUIRED:

a) Prepare the manufacturing account for the year ended 31 December 2016.
b) Prepare the trading account for the year ended 31 December 2016.

QUESTION 3 (15 Marks)

On 31 December 2014 the bank column of Mr. B’s cash book showed a debit balance of $1 500. The
monthly bank statement written up to 31 December 2014 showed credit balance of $2 950.

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 $240 had paid directly to the bank.

- A credit transfer – ZIMRA refund of $260 had been collected by the bank.
- Bank charges $30.
- A direct debit of $70 for RAC subscriptions had been paid by the bank.
- A standing order of $200 for B’s loan repayment had been paid by the bank.
- B’s deposit account balance of $1 400 was transferred into current bank account.

A further check revealed the following items:

- Two cheques drawn in favour of T $250 and F $290 had been entered in the cash
book bur not yet presented for payment.
- Cash and cheques amounting to $690 had been paid into the bank on 31 December
2014 but were not credited by the bank until 2 January 2015.
REQUIRED:

a) Bring the cash book up to date.

b) Prepare a bank reconciliation statement as at 31 December 2014.

QUESTION 4 (20 Marks)

Prepare the accounts receivable and accounts payable control accounts for the month of May 2016
from the details given below:

Balance at 1 May 2016 $

- Accounts receivable (debit) 18 246
- Accounts receivable (credit) 422
- Accounts payable (credit) 8 980
- Accounts payable (debit) 176
Transactions for the month of May:
Purchases on credit 36 270
Cash purchases 30 000
Purchases returns 1 258
Receipts from customers 54 740
Sales on credit 73 510
Cash sales 52 000
Discount received 2 210
Payment to suppliers 30 826
Set off 6 092
Sales returns 3 440
Dishonoured cheques from customers 978
Cash receipts from suppliers in respect of overpayments 4 000
Refunds to customers for overpayments 106
Discount allowed 1 464
Bills receivable 13 012
Provision for doubtful debts 363
Accounts receivable credit balance 31 May 2016 272
Accounts payable debit balance 31 May 2016 134

QUESTION 5 (20 Marks)

Tapiwa and Tawana are in partnership sharing profits and losses in the ratio 3:2 respectively. Their
agreement states that:

a) Interest on capital at the rate of 10% per annum.

b) Interest on drawings at the rate of 10% per annum.
c) Tapiwa to get a salary of $8 000 for extra work.

The following are facts and figures extracted from their books:

Capital at 1/03/15: DR ($) CR ($)

- Tapiwa 40 000
- Tawana 30 000
Current accounts at 1/03/15
- Tapiwa 800
- Tawana 1 600
Gross profit 42 000
Wages 15 000
Bad debts 360
Discount received 1 940
Advertising 200
Depreciation 2 800
Drawings-Tapiwa 7 000
-Tawana 6 500

You are required to prepare:

a) The profit and loss appropriation account for the year ended 28 February 2016.
b) The partners’ current accounts in columnar form.
c) Statement of financial position extract.