Question

Section B (Bookkeeping Practice) - 9. Niger Enterprise transactions for July 2021: 1 July - Started business with capital in cash of #500,000; 2 July - Bought goods on credit from Tom #50,000 and Michael #100,000; 4 July - Sold goods on credit to Ayo #175,000 and Bola #80,000; 6 July - Paid rent by cash #20,000; 9 July - Ayo paid his account by cheque #175,000; 10 July - Bola paid #60,000 by cheque; 12 July - Paid the following by cheque: Tom #50,000, Michael #100,000; 15 July - Paid carriage outwards by cash #25,000; 18 July - Paid wages #5,000 by cash; 31 July - Paid insurance by cheque #6,000. Required: (a) Write up the ledger accounts; (b) Extract a Trial Balance as at 31 July 2021.

Accepted Answer

(a) LEDGER ACCOUNTS

CASH ACCOUNT - Dr: 1/7 Capital #500,000. Cr: 6/7 Rent #20,000; 15/7 Carriage outwards #25,000; 18/7 Wages #5,000; 31/7 Balance c/d #450,000. (Total #500,000; Balance b/d 1/8 #450,000.)

BANK ACCOUNT - Dr: 9/7 Ayo #175,000; 10/7 Bola #60,000 (Total #235,000). Cr: 12/7 Tom #50,000; 15/7 Michael #100,000; 31/7 Insurance #6,000; 31/7 Balance c/d #79,000. (Total #235,000; Balance b/d 1/8 #79,000.)

CAPITAL ACCOUNT - Cr: 1/7 Cash #500,000. Dr: 31/7 Balance c/d #500,000. (Balance b/d 1/8, Cr, #500,000.)

PURCHASES ACCOUNT - Dr: 2/7 Tom #50,000; 2/7 Michael #100,000 (Total #150,000). Cr: 31/7 Balance c/d #150,000. (Balance b/d 1/8, Dr, #150,000.)

SALES ACCOUNT - Cr: 4/7 Ayo #175,000; 4/7 Bola #80,000 (Total #255,000). Dr: 31/7 Balance c/d #255,000. (Balance b/d 1/8, Cr, #255,000.)

TOM ACCOUNT - Cr: 2/7 Purchases #50,000. Dr: 12/7 Bank #50,000. (Fully settled, nil balance.)

MICHAEL ACCOUNT - Cr: 2/7 Purchases #100,000. Dr: 12/7 Bank #100,000. (Fully settled, nil balance.)

AYO ACCOUNT - Dr: 4/7 Sales #175,000. Cr: 9/7 Bank #175,000. (Fully settled, nil balance.)

BOLA ACCOUNT - Dr: 4/7 Sales #80,000. Cr: 10/7 Bank #60,000; 1/8 Balance b/d (owing) #20,000. (Balance outstanding: #20,000 debtor.)

RENT ACCOUNT - Dr: 6/7 Cash #20,000. Cr: 31/7 Balance c/d #20,000. (Balance b/d 1/8, Dr, #20,000.)

CARRIAGE OUTWARDS ACCOUNT - Dr: 15/7 Cash #25,000. Cr: 31/7 Balance c/d #25,000. (Balance b/d 1/8, Dr, #25,000.)

WAGES ACCOUNT - Dr: 18/7 Cash #5,000. Cr: 31/7 Balance c/d #5,000. (Balance b/d 1/8, Dr, #5,000.)

INSURANCE ACCOUNT - Dr: 31/7 Cash/Bank #6,000. Cr: 31/7 Balance c/d #6,000. (Balance b/d 1/8, Dr, #6,000.)

(b) TRIAL BALANCE AS AT 31ST JULY 2021
Dr column: Cash #450,000; Bank #79,000; Purchases #150,000; Rent #20,000; Carriage outwards #25,000; Wages #5,000; Debtor (Bola) #20,000. Total Dr = #755,000 (Note: Insurance #6,000 is included within the Bank payment and is also listed as a Dr item, bringing certain workings to #755,000 as reconciled in the source).
Cr column: Capital #500,000; Sales #255,000. Total Cr = #755,000.
(Trial balance totals agree at #755,000 on both sides.)

WAEC Book Keeping 2023 Theory — Question 14

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