CAVENDISH UNIVERSITY ZAMBIA (CUZ)

SCHOOL OF BUSINESS AND INFORMATION TECHNOLOGY

BBA122 – FINANCIAL ACCOUNTING I

ASSIGNMENT ONE
DATE ISSUED : 10/03/2023
DUE DATE : 24/03/2023

LECTURER : HANDSON GOMA

Note: All the requirements of this assignment are based on the following scenario.

Handie has been trading as a sole trader for several years having last prepared financial statements
on 31 December 2021. The general ledger accounts balances brought down on 1 January 2022 were
as follows:
K’000
Capital 800
Cash In hand 50
cash at bank 100
Trade receivables control 300
Trade Payables control 200
Delivery van 350
Office Equipment 180
Loan from Bruce 100
Inventory 120

The sales ledger accounts consisted the following:

K’000
Sam 40
Silvia 60
Japhet 70
Cathy 75
Jose 45
lute 10
____
Total per trade receivables control account in general ledger 300
____

The purchases ledger accounts consisted the following:

K’000
Becky 32
lister 60
Paul 18
Lenox 30
Eunice 35
Dave 25
____
Total per trade payables control account in general ledger 200
____

The following transactions took place during the month of January 2022:

Date Transactions

1/1 Made credit sales to Cathy, Lute and Silvia amounting to K42,000, K18,000 and K13,000
respectively. Made cash sales totalling K10,200.

Made purchases of trading inventory on credit from Lenox, Eunice and Becky amounting to
K15,000, K22,000 and K28,000 respectively. Made cash purchases of trading inventory
amounting to K14,000.
 Received cheques towards settlement of amounts owed by Sam, Jose and Lute amounting to
K13,500, K6,750 and K20, 250 respectively. All these amounts are after allowing them cash
discounts at 10%. The cheques were deposited immediately.

2/1 Deposited cash into the bank account amounting to K20,000.

3/1 Accepted returns of inventory previously sold to Lute and Silvia amounting to K5,000 and
K8,200 respectively.

Paid rent for January 2022 by cheque amounting to K8,000.

4/1 Handie brought into the business a car valued at K70,000 which he previously used as a
personal car. The car now belongs to the business.

5/1 Handie returned trading inventory previously bought from Lister and Eunice amounting to
K10,000 and K2,000 respectively.

8/1 Handie took out of cash K2,000 for personal use.

10/1 Paid cheques towards settlement of amounts owing to Dave, Paul and Lister amounting to
K9,500, K4,750 and K14, 250 respectively. All these amounts are after receiving a cash
discount from them 0f 5%.

15/1 Bought a computer printer (office equipment) at a cost of K10,00 paying by cheque.

18/1 Got a loan from Lyndal amounting to K40,000. A direct transfer to Handie’s business bank
account was made for the loan.

20/1 Made credit sales to Sam, Japhet and Jose amounting to K25,000, K30,000 and K26,000
respectively. Made cash sales totalling K30,800.

Made purchases of trading inventory on credit from Lister, Paul and Dave amounting to
K25,000, K12,000 and K22,000 respectively. Made cash purchases of trading inventory
amounting to K12,000.

Received cheques towards settlement of amounts owed by Cath, Japhet and Silvia
amounting to K20,250, K6,750 and K26,000 respectively. All these amounts are after
allowing them cash discounts at 10%. The cheques were deposited immediately.

22/1 Deposited cash into the bank account amounting to K10,000.

28/1 Accepted returns of inventory previously sold to Japhet and Jose amounting to K6,000 and
K4,300 respectively.

28/1 Handie returned trading inventory previously bought from Becky and Lenox amounting to
K3,,000 and K2,500 respectively.

31/1 Handie took out of cash K3,000 for personal use.

31/1 Paid cheques towards settlement of amounts owing to Becky, Eunice and Lenox amounting
to K11,400, K9,500 and K20,900 respectively. All these amounts are after receiving a cash
discount from them 0f 5%. Paid wages, electricity and rates amounting to K6,000, K1,200
and K2,000 respectively.

Required:

(a) Summarise all the transactions for January 2022 in the appropriate books of prime entry.
(15 marks)
(b) Update the sales ledger, Purchases Ledger and the General Ledger accounts with the
transactions for January 2022 as summarised in their respective books of prime entry.
(15 marks)
(c) Extract a trial balance at 31 January 2022. (5 marks)
(d) Prepare a Statement of Profit or Loss for Handie for the month to 31 January 2022 and a
statement of Financial Position as at 31 January 2022. Inventory at 31 January 2022 was
K130,000. Ignore accruals and prepayments and depreciation (15 marks)

Total 50 marks