1. Walter presented the following transactions for the month ofMarch 20 13.

March

01 Balance brought forward, Cash $270; Bank overdraft $2 965

03 Mary, who h as an account balance of $10 000, paid her account in full by
cheque after deducting 2% cash discount.

05 Paid electricity expense by cheque $900

08 Received a loan of $4 000 by cheque from a friend

IO Cash Sales $2 300

II Paid Langain a creditor $2 910 by cheque having deducted a 3% cash discount

15 Transferred $2 500 from Bank to Cash

17 Paid wages in cash $3 200

22 Andy, a creditor , was paid $1 425 in cash after allowing Walter a discount of$75.
. ...........,_... ____
28 Cash withdrawn for personal use $200

Prepare Walter 's Three-Column Cash Book on page 3 for the month of March and balance the cash
(a)
book appropri ate ly. (l .J mark
 Three-Column Cash Book for Question 1. (a)

Walter 's Three-Column Cash Book

Discounts Bank Cas h Discounts

Date Details Date Details
Allowed s s Received

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(i) Using the accounts on page 8, give ONE example of EACH of the following
types ofaccounts.

NominalAccount

Personal Account

Current Liability

Non-current Asset

Long-term LiabilitY

(5 marks)

In the space provided on the form below, write a narrative to explain

each
(ii)
transaction identified by the date it occurred'

01 May

03 May

06 May

07 May

(5 marks)

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(b) Phoenix Processors records its weekly cash flow in the format below. The records are for
the first week in the month of July 2016.

2016
July Debit Credit Debit Credit
01 Opening balances
Cash 2 350
Bank 11 890
03 Cash sales 25 690
03 Deposited cash in bank 2s 000 25 000
05 Purchases by t0 470
05 Cashier withdraws cash I 170 I 170
from bank

(i) What kind of entry is the one made on 03 July 2016?

(1 mark)

Cash and bank transactions for Phoenix Processors for the

remainder of July are
as follows:

2016
July
$
08 Owner withdraws cash from bank to his house rent 8 000
09 Debtor - S. Francis paid with a cheque for $2000 and the
2 050
remainder in cash
10 Cash sales deposited in bank account 31 110
ll to creditor - J. Davis cheque 9 900
l8 Purchases for bank's credit card
12 000
25 Cash sales
6 840
29 paid in cash
4 500
(ii) using the form on page 11, prepare the cash Book of phoenix processors
for the
month of July 2016 incruding the transactions of the first
week.
(9 marks)

Total20 marks

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4. On 1 December 2020, Sheba’s bank balance was $3 700 credit. The transactions for the month

DO NOT WRITE IN THIS AREA

of December 2020 were as follows:

December 5 Received and banked a cheque, $10 950, from M. Merick, a credit customer. He
had deducted a trade discount of $270.

7 Paid a cheque to Fray Ltd, a supplier, in full settlement of his account of $4 800
less 2% cash discount.

9 Harry, a credit customer, paid his debt of $5 000 by cheque after deducting a
cash discount of 5%.

20 Received $4 000 by cheque from D. Armstrong.

21 Paid utilities by cheque, $1 200.

26 The bank returned the cheque received from D. Armstrong as he did not have
sufficient funds.

DO NOT WRITE IN THIS AREA

(a) Use the form provided on page 19 to prepare the cash book for the month ending
31 December 2020. Bring down the balance on 1 January 2021.
(11 marks)

DO NOT WRITE IN THIS AREA

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Cash Book

Discount Bank Discount Bank

Date Details Date Details
$ $ $ $

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- 19 -

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