This accounting problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
ScanSolve AI Answer
Hey Kanyiri, good to see you again. Here is the three-column cash book for KAAKYIRE for the month of June, 20X4. Step 1: Set up the three-column cash book format. The cash book has two sides: Debit (receipts) and Credit (payments). Each side has columns for Date, Particulars, L.F. (Ledger Folio), Discount, Cash, and Bank. The discount column on the debit side is for Discount Allowed, and on the credit side is for Discount Received. Step 2: Record the opening balances. On June 1, the cash balance of GH¢5,000 and bank balance of GH¢10,000 are recorded on the debit side as "Balance b/d". Step 3: Record each transaction chronologically. June 3: Sold goods for GH¢2,000. Received GH¢1,000 in cash and GH¢1,000 by bank transfer. Debit Cash GH¢1,000, Debit Bank GH¢1,000. Particulars: Sales. June 5: Paid GH¢500 by cheque to a supplier. Credit Bank GH¢500. Particulars: Supplier. June 10: Received GH¢200 cash discount for early payment to a creditor. This is a discount received. Credit Discount Received GH¢200. Particulars: Creditor (Discount Received). June 12: Paid rent of GH¢1,000 in cash. Credit Cash GH¢1,000. Particulars: Rent Expense. June 15: A customer pays GH¢3,000 by bank transfer and was allowed a discount of GH¢50. Debit Bank GH¢3,000, Debit Discount Allowed GH¢50. Particulars: Customer. June 20: Withdrew GH¢2,000 from the bank for office use. This is a contra entry (C). Debit Cash GH¢2,000 (To Bank), Credit Bank GH¢2,000 (By Cash). June 25: Paid salaries of GH¢1,500 in cash. Credit Cash GH¢1,500. Particulars: Salaries Expense. June 30: Received GH¢500 cash from a customer, allowing a discount of GH¢20. Debit Cash GH¢500, Debit Discount Allowed GH¢20. Particulars: Customer. Step 4: Total the discount columns and balance the cash and bank columns. Discount Allowed Total: GH¢50 + 20 = 70 Discount Received Total: GH¢200 Cash Column: Debit Total: GH¢5,000 + 1,000 + 2,000 + 500 = 8,500 Credit Total: GH¢1,000 + 1,500 = 2,500 Balance c/d (Cash): GH¢8,500 - 2,500 = 6,000 Bank Column: Debit Total: GH¢10,000 + 1,000 + 3,000 = 14,000 Credit Total: GH¢500 + 2,000 = 2,500 Balance c/d (Bank): GH¢14,000 - 2,500 = 11,500 Step 5: Bring down the closing balances as opening balances for the next period. The balances c/d (carried down) on June 30 become balances b/d (brought down) on July