UNIVERSITY OF GHANA BUSINESS SCHOOL

DEPARTMENT OF ACCOUNTING
UGBS 208: INTRODUCTION TO FINANCIAL ACCOUNTING
2ND SEMESTER 2015/2016 ACADEMIC YEAR

Tutorial Set 5 – Single Entries & Incomplete Records

Question 1
Mr. Foli runs an angling shop in Takoradi. He spends most of his time fishing and has
consequently kept no accounting records in the year ended 31 August 2012. He knows that he
has taken GH¢6,800 cash out of his business during the year plus bait which cost the business
GH¢250. He can also remember putting his GH¢20,000 winnings from Superbet Lottery into
the business in March.

Mr. Foli knows that at the previous year end his business had assets valued at GH¢40,000 and
liabilities of GH¢14,600. He has also calculated that the assets of the business at 31/08/12 are
worth GH¢56,000 and the liabilities, GH¢18,750.

Required: Determine the profit or loss for Mr. Foli’s business for the year under review.

Question 2
Ama is sole trader who does not keep a full double entry system of bookkeeping. However,
she has been able to furnish you with the following information on July 31st 2013.
31/07/2013 31/07/2012
GH¢ GH¢
Trade receivables 475,600 286,000
Trade payables 527,400 545,000
Travelling and transport expenses owing 213,000 182,000
Inventory 116,310 175,000
Furniture and fittings 893,000 528,000
Delivery van 1,123,000 1,300,000
Prepaid advertising 92,000 87,200
Rent owing 588,000 411,600

Ama pays all cash received into the bank and all payments are made by cheque. Below is a
summary of the business bank transactions:

GH¢
187,
Bank balance (31/07/12) 500
Cash from customers 872,000
1,900,0
Sales 00
2,959,5

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 00
Payment to creditors 874,850
590,00
Rent 0
Advertising 165,000
Travelling and transport expense 237,000
Furniture and fittings 460,000
Salaries and wages 218,000
Distribution expense 72,000
Bank charges 28,000
Balance at bank (31/7/13) 314,650
2,959,5
00

Discount of GH¢43,100 has been allowed on the receipts from customers and GH¢58,900 has
been deducted from the payments to creditors. Ama charged some of her customers GH
¢29,000 for delaying their payments.

You are required to prepare:

a) Income statement for the year ended 31/7/13
b) A statement of financial position as at that date.

Question 3
Suuntinwong is a building contractor, doing repair work for local householders. His wife
keeps some accounting records but not on a double-entry basis.

The assets and liabilities of the business at 30 June 2012 were as follows:
GH¢
Assets
Plant & equipment: cost 12,600
depreciation to date 5,800
Motor van: cost 9,000
depreciation to date 6,500
Stock of materials 14,160
Debtors 9,490
Rent of premises paid in advance to 30 September 2012 750
Insurance paid in advance to 31 December 2012 700
Bank balance 1,860
Cash in hand 230
Liabilities
Creditors for supplies 3,460
Telephone bill owing 210
Electricity owing 180
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His cash and bank transactions for the year from 1 July 2012 to 30 June 2013 are as follows:

Cash and Bank summary

Receipts Cash Bank Payments Cash Bank
GH¢ GH¢ GH¢ GH¢
Opening balance 230 1,860 Suppliers 83,990
150,88
Receipts from customers 52,640 0 Rent of premises 3,600
Loan received 10,000 Insurance (to 31/12/2013) 1,600
Proceeds of sale vehicle Purchase of plant &
held at beginning of year 3,000 equipment 8,400
Cash paid into bank 24,040 Purchase of new vehicle 12,800
Cash withdrawn from
bank 48,260 Telephone 860
Closing balance 2,100 Electricity 890
Wages of repair staff 68,200
Miscellaneous expenses 1,280
Drawings by Suuntinwong 8,000 29,800
Refund to customers 400
Cash paid into bank 24,040
Cash withdrawn from bank 48,260
Closing balance 890
101,13 191,88 101,13 191,88
0 0 0 0

The following further information is available

1) Plant & equipment is to be depreciated at 25% per annum on the reducing balance
with a full year’s charge in the year of purchase.
2) The new motor vehicle was purchased on 1 January 2013. Suuntinwong’s
depreciation policy is to charge depreciation at 25% per annum on the straight line
basis, with a proportionate charge in the year of purchase, but none in the year of sale.
3) The rent of the premises was increased by 20% from 1 October 2012.
4) The loan of GH¢10,000 was obtained from Suuntinwong’s brother on 1 April 2013. It
carries interest at 10% per annum, payable on 30 September and 31 March.
5) At 30 June 2013, Suuntinwong owed the following amounts:

GH¢
Suppliers 4,090
Telephone 240
Electricity 220

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 Miscellaneous expenses 490
6) At 30 June 2013, amounts due from customers totalled GH¢10,860. Of this amount,
Suuntinwong considered that debts totalling GH¢1,280 were bad and should be
written off.
7) Stock of materials at 30 June was GH¢12,170.
8) Suuntinwong agreed to pay his wife GH¢5,000 for her assistance with his office work
during the year. This amount was actually paid in August 2013.

Required:
Prepare Suuntinwong’s income statement for the year ended 30 June 2013 and his statement
of financial position as at that date.

Question 4
Dzifa, a retailer, did not keep a full set of accounting records for her business. She has
provided the following information in order to complete her financial statements.
At 31 March 2012
GH¢
Insurance prepaid 920
Inventory 11,990
Non-current assets at net book value 95,800
Trade payables 6,750
Trade receivable 19,670
Wages accrued 2,800

Bank Account
GH¢ GH¢
Receipts from sale of non-current assets 13,800 Balance b/d at 1 April 2012 2,438
Receipts from trade receivables 158,600 Insurance 3,700
Wages 35,000
General expenses 7,640
Rent 12,500
Drawings 17,500
Payments to trade payables 86,300
Balance c/d at 31 March 2013 7,322
172,400 172,400
Balance b/d at 1 April 2013 7,322

Dzifa has partially completed her income statement for the year ended 31 March 2013, as
shown below.
GH¢ GH¢
Revenue 153,400
Cost of sales

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 Opening inventory 11,990
Purchases ?
Goods for own use (3,000)
Closing inventory (6,365) ?
Gross profit ?
Less expenses:
Insurance 3,520
Wages 34,720
General expenses 7,640
Loss on sale of non-current assets 600
Depreciation ?
Rent 10,000 ?
Profit (or loss) for the year ?

Additional information
a) There were no cash sales or cash purchases during the year.
b) All sales are calculated at cost plus 60% mark-up.
c) Depreciation on non-current assets was provided at 20% using the reducing balance
method. A full year’s depreciation is provided in the year of purchase and no
depreciation is provided in the year of disposal.
d) The rent paid is for the 15 months ended 30 June 2013.

Required: Prepare a Statement of financial position for the business at 31 March 2013.

Question 5
Eunice deals in the sale of gift items including valentine’s cards. She however, does not keep
proper books of account but has been able to provide you with following information to help
prepare accounts for the year ended 31/12/15
Bank Account
GH¢ GH¢
Balance b/d 322,000 Creditors for goods 499,000
Receipts from debtors 558,000 Wages & Salaries 205,000
Disposal of motor vehicle 49,000 Rent 115,000
Balance c/d 40,000 Motor vehicles purchased 90,000
Insurance 60,000
969,000 969,000

The following balances were also available:

31/12/2015 01/01/2015
GH¢ GH¢
Debtors 45,000 150,000
Creditors 180,000 262,000

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 Wages in advance 30,000 15,000
Insurance in arrears 10,000 43,000
Motor vehicles See note 1 140,000
Stock in trade See note 2 110,000

Notes:
1) The motor vehicle sold had a book value of GH¢25,000. Annual depreciation of 10%
is to be charged on the remaining motor vehicles balance.
2) A mark up of 20% is normally earned on cost of sales. Fire swept through the office
and burnt down all the records on stock, hence her inability to determine the closing
inventory value.
3) A discount of GH¢17,000 was allowed on debtors and GH¢26,000 was received from
suppliers.
4) A debt of GH¢10,000 proved uncollectible and was written off before arriving at the
closing debtors figure above.
5) Cash drawings of GH¢16,000 made by Eunice for her birthday had not been recorded
in any of the books.
6) The opening bank/cash balance was supposed to be GH¢422,000 and not as stated
above.

Required:
a) Redraft the cash/bank summary to show the correct balance.
b) Prepare a statement of affairs as at 01/01/15
c) Prepare an income statement for the year ended 31/12/15
d) Prepare a statement of financial position as at that date for the firm.

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