Question

A.A ENTERPRISES                                              
ADJUSTED JOURNAL ENTRIES / ADJUSTED TRIAL BALANCE                                              
                                              
Assume that you are working as a Senoir Accounts Officer in A.A Enterprise, The financial year 31 December 2018 has just ended and your assistant pepared a trial balance which is showing a difference of £ 47,090 which he had put on the credit side of a suspense account. You have have investigated and have found the following errors:                                              
                                              
                                              
                                              
i)   The total of purchases return day book amounting to £ 16,160 had not been posted to the ledger                                          
ii)   Discount received amounting to £ 11,320 had been debited to discount allowed account.                                          
iii)   The sales account had been added short by £ 10,000                                          
iv)   An asset bought four years ago for £ 7,000 and depreciated to £ 1,200 had been sold for £ 1,500. The receipt of cash has been posted in the bank book but corresponding entries have not been recorded.                                          
                                              
v)   A credit sale of £ 1,470 had been credited to the customer's account as £ 1,740. A bad debt of £ 1,560 has been written off. Provision for doubtful debts is to be maintained at 10% of debtors. Debtors appearing in the trial balance are £ 23,390 and the provision for bad debts account shows a credit balance of £ 2,320                                          
                                              
                                              
vi)   A sub-total of £ 29,830 on the list of closing stock had been carried over as £ 29,380 and another sheet had been overcast by £ 1,000                                          
                                              
                                              
Based on the above information, you are required to prepare Adjusting Journal Entries to be incorporated in the Trial Blance as on 31 December 2018                                              
                                              

Answer 1

AA Enterprises – General Journal
Items	Accout Titles and Decription	Debit	Credit
1)	Suspense Account	£ 16,160.00
	Purchase return		£ 16,160.00
2)	Suspense Account	£ 22,640.00
	Discount Allowed		£ 11,320.00
	Discount Received		£ 11,320.00
3)	Suspense Account	£ 10,000.00
	Sales		£ 10,000.00
4)	Accumulated depreciation – non-current assets (7000-1200)	£   5,800.00
	Suspense Account	£   1,500.00
	Non-current assets		£   7,000.00
	Profit on Sale of non-current assets		£      300.00
5)	Customer Account  (1,740+1,470)	£   3,210.00
	Suspense Account		£   3,210.00
	Allowance for Doubtful Debts	£   1,560.00
	Sundry Debtors		£   1,560.00
	Profit and Loss (see working notes)	£   1,744.00
	Allowance for Doubtful Debts		£   1,744.00
6)	Trading Account (1000 - (29830-29380)	£      550.00
	Closing inventory		£      550.00
	Debtors A/c
Balance b/d	£                                                                              23,390.00	£   1,560.00	Allowance for doubtful debts A/c
Suspense A/c	£                                                                                3,210.00	£ 25,040.00	Balance C/d
	£                                                                              26,600.00	£ 26,600.00
	Allowance for Doubtful Debts A/c
Debtors	£                                                                                1,560.00	£   2,320.00	Balance b/d
Balance c/d (10% of Rs.25,040)	£                                                                                2,504.00	£   1,744.00	Profit and loss – bad debts (balancing figure)
	£                                                                                4,064.00	£   4,064.00