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Csec Principles of Accounts

Suggested Solutions

Csec: May 2018, Question #1

4/27/2019

5 Comments

 
No. 1(a): Preparation of Cash Book for the month of 31st March 2018.
Workings:
1. 
26th March 2018 the total of the cheque to Jeff’s Air-Con:
Cheque will equal $7,500 less a 5% discount.
The discount equals 5% x $7500 = $375.
Therefore the cheque total equals = $7,500 - $375 = $7,125.

2. 30th March 2018 the total of the cheque received from Layby Stores:
​Invoice total on the 13th March sent to Layby Stores equals $2,250 less 20% trade discount.
The discount equals 20% x $2,250 = $450.
Therefore the invoice total equals = $1,800.
19th March 2018 the total of the credit note sent to Layby Stores equals $200 less 20% trade discount.
The discount equals 20% x $200 = $40.
Therefore the credit note total equals $200 - $40 = $160.
This means that the total on Layby Store’s account on the 30th March 2018 = $1800 - $160 = $1640.
Layby Stores was given a cash discount of $150 therefore the cheque received from Layby will equal
$1640 - $150 = $1,490.
Now that the workings has been completed the Cash Book for the month ended 31st March, 2018 can be prepared.
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No. 1(b): The significance of the balance brought down on the bank account at 31st March 2018:
The balance of the bank account at the 31st March 2018 is credit of $1,035. This means that Sanjeev's bank account is in overdraft. He owes the bank $1,035 as at the 31st March 2018.
No. 1(c): Preparation of DD Ltd’s account showing the balance outstanding at the end of March 2018:
5th March 2018 the total of the invoice received from DD Ltd:Invoice will equal $7,500 less a 25% discount.
​The discount equals 25% x $7500 = $1,875.

Therefore the invoice total equals = $7,500 - $1,875 = $5,625.
14th March 2018 the total of the credit note received from DD Ltd equals $800 less 25% trade discount The discount equals 20% x $800 = $200.
Therefore the credit note total equals = $800 - $200 = $600.
​This means that the total owed to D
D Ltd 31st March 2018 = $5,625 - $600 = $5,025.
Now that the workings has been completed DD Ltd's account for the month of March 2018 can be prepared.
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I hope that you found this proposed solution helpful! If you did please share it! Also, feel free to ask any questions or to make your comments below. Good Luck!
5 Comments
Speciale
5/7/2019 03:31:22 pm

Why was DD Ltd. wasn't in 1a answer?

Reply
Krystal
5/8/2019 09:16:54 pm

Hi Speciale!

DD Ltd's transactions were not included in part 1(a) because part 1(a) requires you to prepare the Cash Book. The Cash Book only records cash transactions. The term "cash transaction" refers to any transaction that includes the transfer of money either in cash or via a cheque. As neither of the two transactions listed for DD Ltd involves the transfer of money they cannot be entered into the Cash Book.

I hope this helps to clear things up for you. Best of luck!

Reply
Leah
5/9/2019 11:29:16 am

I attempted the entire paper

Is there a possibility of providing the solutions to may/June 2018

Reply
Accounting Lyceum
5/10/2019 12:51:25 am

Hi Leah!

We just posted the solutions to Question#3 of May/June 2018. We are trying our best to publish the rest of the suggested solutions for this paper soon!

Best of luck to you in your upcoming exams!

Reply
Jose A
3/7/2020 12:14:34 pm

Thank you for making the answer sheets, appreciate it.

Reply

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    The author holds a Bsc (Hons) Degree in Applied Accounting from Oxford Brookes University, England and enjoys a successful career as an Accounting Supervisor and a private tutor.

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