BOOK KEEPING

HOLIDAY PACKAGE FORM 4

1. Briefly describe the meaning of the following terms as used in book keeping:

(a) Accrued expenses

(b) Book keeping
(c) Credit transaction
(d) Carriage outwards
(e) Net profit
2. Upendo is a business woman who owns a Jewels shop in Arusha. She is also a customer of
CRDB bank. Upendo prefers to settle her debts using cheques. In the last month, she wrote a
cheque to Onesmo, her creditor, for which the bank refused to settle it. In five points outline
the reasons for this to happen.
3. On 31st December 2017, the cash book balance of ShedrackTraders was TZS 25,370/= where
the bank statement showed a credit balance of TZS 25, 670/=. In comparing these two
balances, the following were discovered;
(a) Cheques not yet presented for payment TZS 12,340/=
(b) Cheques paid into the bank but not yet credited by the bank account TZS 12,160/=
(c) Items shown in the bank statement but not yet entered in the cash book were as follows:
i. Bank charges TZS 240/=
ii. Standing order TZS 460/=
iii. Dividends collected by the bank TZS 820/=
Required:
(a) Bring the cash book to date to show the correct cash book balance.
(b) Prepare a bank reconciliation statement starting with the adjusted cash book balance.

4. Rule a petty cash book under the following headings: - Postage, stationery, Petrol,
entertainment and ledger.
2020 TZS
March 12 Petty cashier received cash from main cashier…………………. 15,000
14. Paid postage………………………………………….. 500
16. Paid entertainment…………………………………… 3,000
18. Paid petrol…………………………………………….. 1,200
20. Paid B. Robert, a creditor……………………………… 4,000
25. Paid for stationery…………………………………… 1,700
29. The cashier reimbursed the petty cashier the amount spent in the period.

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5. Mtumzima Transport Company with the financial year ending on 31 st December, bought two
motor vans on 1st January 2011, No 1 for TZS 18,000,000 and No 2 for TZS 15,000,000. It
also buys another van, No. 3 on 1st July 2012, for TZS 19,000,000 and another No 4 on 1st
October, 2013 for TZS 17,200,000 the van No 1 was sold for TZS 6,290,000 on 30th September
2014. It is a company’s policy to charge depreciation at 15% per annum using a straight line
method for each month of ownership basis.

Required: Prepare for the year ended 31st December, 2011, 2012, 2013 and 2014.

a. Motor van account

b. Accumulated Provision for depreciation account
c. Motor van disposal account

6. The following trial balance has been extracted from the ledger of Julius, a sole trader.
Trial balance as at 31st May, 2022

S/N Name of account DR CR

1 Purchases and sales 82,350 138,078

2 Carriage 5,144

3 Drawings 7,800

4 Rent, rates and insurance 6,622

5 Postage and stationery 3,001

6 Advertising 1,330

7 Salaries and wages 26,420

8 Bad debts 877

9 Allowance for doubtful debts 130

10 Accounts receivables and payables 12,120 6,471

11 Cash in hand 177

12 Cash at bank 1,002

13 Inventory as at 1.6.2021 11,927

14 Equipment (at cost) 58,000

15 Accumulated depreciation on 19,000

equipment

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 16 Capital 53,091

The following additional information as at 31st May, 2022 is available:

(a) Rent is accrued by TZS 210/=

(b) Rates have been prepaid by TZS 880/=
(c) TZS 2,211 of carriage represent carriage on purchases
(d) Equipment is to be depreciated at 15% p.a on cost.
(e) The allowance for doubtful debts to be increased by TZS 40/=
(f) Inventory at the close of business has been valued at TZS 13,551/=
Required:
Prepare Julius’s Income statement for the year ending 31st May, 2022 and a Statement of
financial position as at that date.

7. The following information is available from the books for Abigail Wholesale Store on 1st
September, 2021:
Balances in purchases ledger TZS 120,000 (CR)
Balances in sales ledger TZS 7,100 (CR)
Balances in purchases ledger TZS 4,800 (DR)
Balances in sales ledger TZS 163,100 (DR)
During September 2021:
Sales 140,000
Purchases 88,000
Returns inwards from debtors 55,000
Returns outwards from creditors 7,300
Receipts from debtors 91,300
Payments to creditors 76,700
Discount allowed 4,000
Discount received 2,200
Bad debts written off 3,800
Provision for bad debts increased by 600
Debtors cheque dishonored 7,500
Interest charged to debtors on overdue accounts 500

Sales ledger debit transferred to purchases Ledger 9,600

Notes:
(a) 10% sales and discount allowed relate cash transactions

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(b) 5% of the goods bought during the month were destroyed by fire, the insurance company
had agreed to pay adequate claim.
You are required to prepare:
(i) A sales ledger control account
(ii) A purchases ledger control account

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