answer from part (b)

(a) Mr Bush Phiri runs a business providing equipment for bakeries. He always makes a note of his credit sales but he is not sure on how to account for VAT on his sales. Currently, the VAT rate is 16%. During the first week of March 2018, the following credit sales took place. All figures include VAT. March 1K. Banda bought cake tins priced at K580. March 3 F. Jere bought K1 392 worth of equipment. March 4 W. Sashi bought a new oven for K4 640. March 6 P. Patrice purchased goods at a cost of K2 552. March 7K. Banda bought some oven-proof dishes at a cost of K696. Required: Enter the above transactions in Mr Bush Phiri's sales day book clearly showing for each transaction the net sales value, VAT amount and the Invoice amount. (6 marks) (b) The trial balance of Buumba Ltd has an excess of debit balances over credit balances of K 24 , 995. A suspense account has been opened to balance the trial balance. The following transactions were later discovered: (i) Interest paid of K5, 000 and Interest received of K8,000 have both been entered on the wrong side of the trial balance. (ii) The receivable control account balance of K224,387 had been included in the trial balance as K242, 387 (iii) Sales of K3,000had been emitted from the sales records (i.e. from the sales day book). (iv) Purchase of raw material of K4,005 was entered in the purctase accouzt as K4,500. (iv) The balance on the curren account of K12, 500 for the Proprictor's wife had been ominted from the trial bulance. This inem when corected will elear the suspense accoum. Requeired: State and explain three (3) crrors that will not affect the balancing of a trial balanee and epen a saspense accoant and correct the above transactions in it. (6emarks) (c) LG Lad has prepared its October 2021 bank reconciliation for auditors to revicw. As an 31 Oetober 2021 the ledger balance was K2, 490 (Credit) but the buak staterncat showed that the company has funds amounting to K3,743. The following are wseful information: (1) The company arranged for the hank to transfer the dollar equivalent of KS00, 000 so a sapplier in the United States. Charges on the transfer of 0.5% have not been recorded in the books of LG l.fd. (2) The CEO of LG LAd arranged for an amount of K3,000 to be transferred from his personal bank account irrte the company's account. The tank made the transfer on 31 October 2021, but LG Ltd has not made any entry in its books. (3) A Cheque for ZESCO (Electricity Company) amourning to K5, 600 issood and rocosdod correctly in the bank statements appeared in LG ledger as K6, 500 . (4) The following cheques issued by LG Ltd in Odober 2021 did not appear on the bank statement: Cheque * 20450KZ,000 Cheque =20456K4,800 Cheque 20500K5,250 (5) Inconcearned on imvesment with an advice by the hank of K2, 457 was not recorded by the bank untiti 3 November 2021. (6) Thee cheques received and booked by 16 Lid amounting to K4, 800 were not ceedited by the bank: Requeired: (2) Prepare the bank account in LG Ld nominal ledger including any adjusting extries based on the information above. (4marks) 2 (ii) Prepare a reconciliation of the bank stateneat bulance to the cocrected balance on the bank account in LG Ldd nominal ledger. (4marks) [Tetal-2e Marks]