The accountant of Adom Providers Ltd has begun preparing financial statements for the year ended 31st December 2015, but the work is not yet complete. At this stage, the items included in the trial balance are as follows:

The following additional information is relevant: i) Sales for the year ended 31st December 2015 had been overcast by GHȼ2,300. ii) A credit note for GHȼ3,500 for goods returned to Abu, a supplier, had not been posted to the supplier’s account. iii) Discounts received of GHȼ1,400 had been posted to the debit side of the discounts allowed account. iv) A credit purchase from Manu of GHȼ640 had not been entered in the books. v) A new motor vehicle purchased for GHȼ14,000 had been recorded as a motor expense. Depreciation has been correctly entered in the accounts. vi) The debentures were issued three months before the year end. No entries have been made as regards interest. vii) A dividend of 5 per cent of share capital was declared before the year end, but not paid until after the year end.

Required:

a) Prepare journal entries with narratives to correct each of the errors in notes (i) to (v) above. (7 marks)

b) Prepare a statement to show the revised operating profit. (4 marks)

c) Prepare for Adom Providers Ltd for the year ended 31st December 2015:

• i) Statement of profit or loss for the year. (2 marks)
• ii) Statement of Financial Position for the year end. (7 marks)