KOYJOY Ltd. is a limited liability company that has maintained account with Larry Commercial Bank ltd for the past twenty (20) years. The account has recorded an impressive turnover since its inception. They have enjoyed several facilities all of which has been paid on schedule.

Consider the following transactions on their account for the first half of the year 2019:

(i) On 2nd January,2019 the company deposited an amount of forty thousand Ghana cedis.

(ii) The company was awarded a contract to execute a road construction from Kyebi to Obosomase at a contract sum of GHS 5 Million. On 2nd February, 2019 the company deposited an amount of GHS 2.0 Million out of their contract sum into their account, but withdrew GHS 1.0 Million on the same day.

(iii) A company by name Zipland Limited transferred an amount GHS 16,000 into their account on 18th February ,2019.

(iv) The financial controller of the company paid into their account a cheque of GHS 1.05 Million drawn on Stanbic Bank Gh. Ltd on 25th February, 2019. The cheque was however cleared on 28th February ,2019.

(v) KOYJOY Ltd was on 1st March,2019 allowed to withdraw GHS 3.0 Million from the account for the payment of employee salaries

(vi) A letter of credit of GHS 10.0 Million was approved in respect of KOYJOY Ltd. and paid a commission of 0.05% and a processing fee of 0.025% respectively on the 

L/C amount on 12th April, 2019.

(vii) A Deposit of GHS 100,000 was made on 20th May, 2019.

(viii) A cheque of GHS 100.000 was issued to a third party by KOYJOY on 6th June to purchase office equipments for the company.

Required:

1. Construct a statement of accounts for KOYJOY Ltd. from 2nd January ,2019 to 30th June, 2019.

2. How would you describe the balance on the account as at 1st March, 2020?

3. What account type will allow such balance on the account? Name two features of this account.

4. Assuming that on 30th June 2019, the bank charged a COT of GHS 5,000.00 and debit interest of 10% on overdrawn balance as at 6th June, 2019.

(i) Determine the final balance on KOYJOY’s account.

Answer rating: 100% (QA)

1 The statement of account for KOYJOY Ltd from 2nd January2019 to 30th Jun... View the full answer