Refurbished iPhone 5s (16Gb) says out of storage space when it shouldn't be out.

My sister recently got a refurbished 16 Gb iPhone 5s through AT&T. When I went to sync her data from her old iPhone 4 (16 Gb) it told me that there was not enough storage space on the phone. Because here old iPhone was never upgraded to iOS 7, I figured that the lack of room was associated with the larger operating system (I know a few people who had that issue last September). After skimming down her photos and music, I managed to sync the phone.
However, her phone displayed a message saying that it was low on storage space. I checked in the usage menu in the settings to see that there is 0 bytes available and 12.6 Gb used. Since I watched my sister remove half of her music library and 1,000 photos, I didn't believe that the storage could be completely out. After a quick tally of the apps in the usage menu, I estimate that just under 8 Gb of memory should be used.
I'm not sure if there is some other program or part of the OS that is using up the rest of the memory (seems unlikely) or is it possible that the issue is related to the fact that it is a refurbished phone. I would greatly appreciate any suggestoions or explanations as to why this happens.
Thanks in advance,
Tim

mikeyllorin wrote:
........What do you mean by 'refreshing system preferences'? I just restarted my Mac before I checked but the same storage info is seen in my iPad and iPhone.
Yes, that's what I meant my restart.
What happens if you add, say a new pages document.
Hold down the alt key after opening the Finders 'Go" menu, choose 'Library' from the menu, look in 'Mobile Documents' and let me know what you see, you can look in various folders at will, but don't go moving or deleting anything. Look for any large unexplained documents.

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