a) Does every employee have the right not to be unfairly dismissed?                                                                              (10 marks)

b) Discuss five reasons which if one is established against the employee by the employer, may make the dismissal fair.(10 marks)

Eddie is the manager of A-LIFE shopping mall owned by Bertha. In January he is told by Bertha not to buy biscuit from a new company called Crunch Ltd, because she has heard that their products are of poor quality.

On 18th February Christa, a representative of Crunch Ltd visits the A-LIFE shopping mall and as a result Eddie orders 10,000 cedis worth of biscuits. Christa is unaware of Bertha’s instructions.
When later in the day Bertha discovers what Eddie has done, they have arguments and Eddie resigns. The following day Eddie goes to Drinkit Ltd, Berthas regular supplier of wine and spirit and purchases 10 cases of whisky on credit in Bertha’s name. He then absconds with the whisky.
Bertha comes to seek your advice as to her liability to:
a. Crunch Ltd;                                                                                                                                                                    (10 marks)

b. Drink it Ltd.                                                                                                                                                                   (10 marks)

The Constitution of the republic of Ghana 1992 consists of twenty six (26) chapters. Each chapter is arranged into articles and each article into clauses.
Mention any TEN topics dealt with in any TEN chapters of the Constitution.
                                                                                                                                                                                           (20 marks)

Required:

a) Prepare a statement of cash flow as at 31 December 2017 for Mensah & Co. Ltd using the indirect method.

b) Differentiate between Direct and Indirect Method of reporting cash flow from operating activities.                   (3 marks)

ABC Ltd has prepared its October 2018 bank reconciliation for auditors to review. As at 31 October 2018 the ledger balance was GH¢ 2,450 (Credit) but the bank statement showed that the company has funds amounting to GH¢3,743.

The following are useful information:

The company arranged for the bank to transfer the dollar equivalent of GH¢ 500,000 to a supplier in the United States. Charges on the transfer of 0.5% have not been recorded in the books of ABC Ltd.

The CEO of ABC Ltd arranged for an amount of GH¢3,000 to be transferred from his personal bank account into the company’s account. The bank made the transfer on 31st October 2018, but ABC Ltd has not made any entry in its books.

A Cheque for Electricity Company amounting to GH¢5,600 issued and recorded correctly in the bank statements appeared in ABC ledger as GH¢6,500.

The following cheques issued by ABC Ltd in October 2018 did not appear on the bank statement:

Cheque # 00450 – GH¢2,000

Cheque # 00456 – GH¢ 4,800

Cheque # 00500 – GH¢ 5,250

Three cheques received and booked by ABC Ltd amounting to GH¢ 4,800 were not credited by the bank

Income earned on investment with an advice by the bank of GH¢2,457 was not recorded by the bank until 3 November 2018.

Required:

i) Prepare the bank account in ABC Ltd nominal ledger including any adjusting entries based on the information above.   (5 marks)

ii) Prepare a reconciliation of the bank statement balance to the corrected balance on the bank account in ABC Ltd nominal ledger.                                                                                                                                                                                 (5 marks)

a) State and explain TWO (2) errors that will not affect the balancing of the trial balance.                                              (4 marks)

b) The trial balance of Pak Ltd has an excess of credit over debit of GH¢12,500. A suspense account has been opened to balance the accounts. The following transactions were later discovered:[/vc_toggle][/vc_column][/vc_row]

i) Interest paid of GH¢5,000 and Interest received of GH¢8,000 have both been entered on the wrong side of the trial balance.

ii) The receivable control account balance of GH¢224,387 had been included in the trial balance as GH¢242,387

iii) Sales of GH¢2,000 had been omitted from the sales records (i.e from the sales day book).

iv) Purchase of raw material of GH¢4,005 was entered in the purchase account as GH¢4,500.

v) The balance on the current account with the Proprietor’s wife had been omitted from the trial balance. This item when corrected will clear the suspense account.

Required:

Open a suspense account and correct the above transaction in it.                                                                                      (6 marks)

Ashiyie Ltd is a telecommunication company that prepares accounts in accordance with International Financial Reporting Standards (IFRS). A meeting of the Directors of Ashiyie Ltd is scheduled for 5 December 2017 to discuss the following matters with a view to finalising the accounts for the year ending 30 October 2017:
i) A fire occurred in one of the warehouses of Ashiyie Ltd on 3 November 2017, destroying inventory which had a cost price of GH¢100,000 and a net realisable value of GH¢150,000.
ii) On 9 November 2017, Ashiyie Ltd received information that one of their largest customers had gone bankrupt. At 30 October 2017, this customer owed Ashiyie Ltd GH¢235,000. It is anticipated that Ashiyie Ltd can only receive 10 pesewas for every GH¢1 they were owed.
iii) In November 2017, Ashiyie Ltd sold inventory which had been in one of their warehouses for the past two years, for GH¢75,000. This had been included in the financial statements, for the year ended 30 October 2017, at its cost price of GH¢105,000.
iv) On 30 October 2017, an employee of Ashiyie Ltd fell and injured her arm at work. This employee has commenced legal action. The Solicitors for Ashiyie Ltd informed the company on 10 August 2017, that it is probable they will be found liable and have to pay this employee GH¢33,000. The employee has worked for Ashiyie Ltd for the past 4 years.
Required:
Advise the board on the accounting treatment of these issues. Your answer should give a detailed reason for the accounting treatment that you have chosen.                                                                                                                                       (10 marks)

When two or more individuals come together to form a Partnership, it is advisable to have a correctly drafted Partnership Agreement carefully detailing the terms of the business relationship. A partnership agreement is a contract between partners in a partnership which sets out the terms and conditions of the relationship between the partners.
Required:
Identify and explain FIVE key issues that should be covered in a partnership agreement when setting up a partnership.    (10 marks)

The owners of three electrical shops which sell very similar goods, but which operate in different towns, have agreed to discuss their business practices. They hope to identify ways in which each might improve performance. As a first step, the three businesses have sent their latest annual reports to an accountant. The accountant has made sure that their financial statements are comparable in terms of accounting policies and assumptions and has summarised the main figures. The accountant has prepared the following summary:

Required:
a) Compute TWO ratios each of profitability and efficiency of the shops, highlighting areas in which one or more appear(s) to be most successful.

b) You should make comments on what each ratio tells the user.

Sawaba Limited is a company involved in the construction and fitting of kitchens and wardrobes. The following trial balance was extracted from its books as at 31 October 2017:

The following information, based on your investigations, has also come to your attention:
i) Inventory as at 31 October 2017 was GH¢387,100.
ii) Depreciation is to be charged as follows:

• Buildings 4% Straight Line on Cost
• Plant & Equipment 15% of Reducing Balance
• Land is not being depreciated.

iii) The land and buildings was revalued in total at GH¢1,300,000, of which land amounted to GH¢200,000, as at 31 October 2017. This has not been recorded in the books.
iv) Rent relates to a display unit rented and its rental period is yearly starting on 1 April each year. The yearly amount of GH¢12,000 is paid in full on this date.
v) There are outstanding balances for Marketing Costs, Salaries and Telephone Expenses amounting to GH¢2,420, GH¢3,610 and GH¢280 respectively which have not yet been included in the above trial balance.

vi) A customer owing GH¢6,000 went into liquidation. The liquidator has assured Sawaba Limited that it will receive 10% of the amount. Sawaba Limited has decided that the Allowance for Doubtful Debts should be set at 5%.
vii) Provide for any Loan interest due.
viii) All Expenses are to be allocated evenly between Distribution Costs and Administrative Expenses.
Required:
Prepare a Statement of Profit or Loss Account and Statement of Financial Position for Sawaba Limited for the financial year-ending 31 October 2017.