Page 76 - Book-keeping for Secondary Schools Student’s Book Form One

Book-Keeping for Secondary Schools

Example 4.6
Mlingoti Shop had the following values for assets and liabilities as at 1 May 2023.
st
Assets Motor van TZS 7,400,000; Fixtures TZS 3,600,000; Inventory TZS 8,400,000.
Accounts receivable; Halima TZS 190,000; Jackson TZS 90,000; Bank

TZS 1,720,000; Cash TZS 130,000.
FOR ONLINE READING ONLY

Liabilities Accounts payable – Queen TZS 258,000; Edgar TZS 820,000.

Solution
The total assets is:

TZS (7,400,000 + 3,600,000 + 8,400,000 + 190,000 + 90,000 + 1,720,000 + 130,000)
= 21,530,000

While the total liabilities is TZS (258,000 + 820,000) = 1,078,000. The accounting
equation is:

ASSET = CAPITAL + LIABILITIES

Since the value of assets and liabilities of Mlingoti is known the value of the capital can
be determined through rearrangement of this equation as follows:

CAPITAL = ASSETS – LIABILITIES
Therefore: CAPITAL = TZS (21,530,000 – 1,078,000) = 20,452,000

After obtaining the value of capital, the journal proper can now be prepared as follows:

Journal Proper
Date Details Folio Debit Credit
TZS TZS

2023 May 1 Motor van 7,400,000
Fixtures 3,600,000
Inventory 8,400,000
Accounts receivable: Halima 190,000

: Jackson 90,000
Bank 1,720,000
Cash 130,000

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Student’s Book Form One

Book Keeping Form 1 New 2024 FINAL.indd 68 18/10/2024 10:14