a) The following summarized trial balance appeared in the books of MakossaEnterprises.Purchases and SalesDR _120,000CR200,000Debtors and creditors 80,000 50,000Cash 40,000Other assets and other Liabilities 240,000 200,000Suspense Account 30,000Total 480,000 480,000Subsequent investigations revealed the following errors:i) A sales invoice of Sh.20,000 had not been recognized in the books of accountsii) A cash receipt from a debtor of Sh.15,000 had not been adjusted in the debtors accountiii) A cash payment to a creditor of Sh.9,500 had been debited to the creditor’s account asSh.4,900iv) A purchase of a computer of Sh.50,000 for use in office work had been debited tothe purchases accountP.O. Box 90830100 Eldoret – KenyaTelephone: 0728458276Fax: 254-20-891084Email:[email protected]/ACD/EXM/SEPT - DEC 2022/GABA/BCOM Page 2ISO 9001:2015 Certified by the Kenya Bureau of Standards.v) The accountant had failed to bring forward a balance of Sh.19,600 in the wagespayable account in the post-closing trial balance of the previous financial yearRequired:i) Journal entries to correct the identified accounting errors (5 Marks)ii) The suspense account (5 Marks)iii) The corrected trial balance

The trial balance extracted from the books ofTim on 31/12/2020 is as follows.Dr. Cr.Kshs. Kshs.Capital 217,500Land and building 150,000Equipment at cost 37,500Depreciation provision for equipment 15,000Fitting at cost 37,500Depreciation provision fittings 17,250Stock 21,375Salaries and wages 57,750Purchases 225,000Administrative expenses 30,000Cash in bank 37,500Cash at hand 7,500Debtors 37,500Creditors 21,375CUEA/ACAD/EXAMINATIONS/DIRECTORATE OF EXAMINATIONS & TIMETABLING Page 3ISO 9001:2015 Certified by the Kenya Bureau of Standards.Sales 375,000Carriage out ward 1,500Carriage inward 750Return inward 1,125Return out ward 1,400Discount allowed 2,250Discount received 1,225Bad debts written 1,500Total 648,750 848,750Additional informationi) Closing stock was valued at kshs30,000ii) Wages paid in advance shs2000iii) Administrative expenses outstanding shs 1500iv) Depreciation to be charged 10% on cost of equipment and 5% on cost of fittings.v) 5% provision for doubtful debts .Required;i) Trading profit and loss account for the period ending 31/12/20 (13 Marks)ii) Balance sheet as at 31/12/20

The trial balance can help in detecting errors. Identify which of the following errors would be detected at the point of extracting a trial balance. 1-The bookkeeper enters cash received of Sh 50,000 from Peter Jones as a debit in the cashbook but enters the credit of Sh 50,000 in the ledger account of Roger Jones. 2-The bookkeeper enters a cash sale as a credit of Sh 4,000 in the cash book and as a debit of Sh 4,000 in the sales account. 3-The bookkeeper omits a cash sale of Sh 23,000 from the cash book and from the sales accounts. 4-The bookkeeper enters a cash sale as a debit of Sh 49,000 in the cash book and as a credit of Sh 94,000 in the sales account Choose: not possible to tell; will not be detected, trial balance will still agree; will be detected by the trial balance not agreeing; may or may not be detected

Peter has extracted the balances from his ledgers as at 30 March 2020. The trial balance won’t balance, the credits exceed the debits by Sh 1,536. You have been asked to help correct the problem. After inspection of the ledger accounts, you have discovered the following errors. For each error indicate (by dragging the answers given at the bottom and dropping at the right place) whether correction would require the use of the suspense account or not. 1. A balance of Sh 818 on a debtor’s account, Mawingu, has been omitted from the schedule of debtors, the total of which was entered as debtors in the trial balance. blank 2. A small piece of machinery purchased for Sh 1,200 had been entered in the repair account. blank 3. The receipts side of the cash book had been under cast by Sh 720. blank 4. The total of one page of the sales journal had been carried forward as Sh 8,154 instead of the correct amount which was Sh 8,514. blank 5. A credit note for Sh 179 received from a supplier, Markone Investments, had been posted on the wrong side of her account. blank 6. An electricity bill in the sum of Sh 152, not yet accrued for, was discovered in the filing tray. blank Do not use suspense account Do not use suspense account Do not use suspense account Use suspense account Use suspense account Do not use suspense account Do not use suspense account Use suspense account Use suspense account Do not use suspense account Use suspense account Use suspense account

The following trial balance was extracted from the books of Rose Martins, a sole trader on 31 December 2005. Sh. Sh.Capital 2,880,000Freehold land and buildings at cost 1,120,000Motor vehicles at cost 1,094,000Furniture and fittings at cost 240,000Stock at 1 January 2005 960,000Purchases and sales 9,408,000 11,088,000Debtors and creditors 936,000 695,200Discounts allowed and received 195,200 119,200 Returns inwards and outwards 16,000 28,800Rent received 44,000 Loan (interest payable 5% per annum) 192,000Interest on loan 4,800Proceeds of sale of motor vehicle 150,000Provision for doubtful debts 27,200Bad debts 52,000Wages and salaries 1,127,200Drawings 256,000General expenses 138,400Bank balance 108,800Rates and insurance 48,000Provisions for depreciation: Furniture and fittings 160,000 Motor vehicle 320,000 15,704,400 15,704,400Notes:1. Stock at 31 December 2005 was valued at Sh. 1,360,000.2. Included in general expenses is a sum of Sh. 26,400 being expenses on electricity for domestic use.3. A vehicle purchased on 1 January 2003 at Sh. 450,000 was sold for Sh. 150,000. The only record of the transaction is the credit of Sh. 150,000 to the proceeds of sale of motor vehicle account.4. As at 31 December 2005, wages and salaries outstanding amounted to Sh. 66,400.5. Prepaid rates and insurance as at 31 December 2005 stood at Sh. 12,000.6. Interest paid is only a half of the amount due for the year ended 31 December 2005.7. Provision for doubtful debts is to be adjusted to 5% of the debtors.8. Depreciation is to be provided for as follows:(i) Furniture and fittings at 5% on reducing balance method(ii) Motor vehicles at 20% on straight line method.9. Rent owing from a tenant who occupies a part of the building was Sh. 40,000 on 31 December 20005.Required:a) Profit and loss account for the year ended 31 December 2005.b) Balance sheet as at 31 December 2005.

The following trial balance was taken from the books of DRC Biz on 30th June2018.Dr. Cr.Shs. Shs.CUEA/ACAD/EXAMINATIONS/DIRECTORATE OF EXAMINATIONS & TIMETABLING Page 6ISO 9001:2015 Certified by the Kenya Bureau of StandardsDrawings 200,000Purchases and sales 7,132,000 9,230,000Wages and salaries 423,000Cash at bank 60,000Cash at hand 7,000Debtors and creditors 700,000 582,000Capital 2,000,000Stock 1st July 2017 533,000Electricity and telephone 140,000Premises at cost 1,000,000Office expense (including stationery) 95,000Provision for bad & doubtful debts,1st July 2017 10,000Rates and insurance 124,000Bad debts written off the year 29,000General expenses 144,000Motor vehicles running expenses 384,000Motor vehicles at cost 480,000Furniture & equipment at cost 450,000Provision for depreciation on motor vehicles 39,000Provision for depreciation on furniture& equipment 50,000Returns inwards and outwards 230,000 100,00012,071,000 12,071,000CUEA/ACAD/EXAMINATIONS/DIRECTORATE OF EXAMINATIONS & TIMETABLING Page 7ISO 9001:2015 Certified by the Kenya Bureau of Standardsb) Prepaid insurance amounted to Shs. 31,000 and unused stationery toShs. 16,000 on 30th June 2018c) Provision of bad debts should be adjusted to 2 % of debtorsd) 20% depreciation should be provided on the cost of motor vehicles and12½% on the book value of furniture and equipment.e) The stock on 30th June 2018 had a cost value of Shs. 565,000.Required:-a) Trading Account (6 marks)b) Profit and Loss Account (8 marks)c) Balance Sheet (6 marks)*END*CUEA/ACAD/EXAMINATIONS/DIRECTORATE OF EXAMINATIONS & TIMETABLING Page 8