Question

Q10-9: SUZZY AND DARYL VENTURES The bookkeeper has prepared a preliminary trial balance of Suzzy and Daryl for the year ended Dec 31, as follows.

Q10-9: SUZZY AND DARYL VENTURES The bookkeeper has prepared a preliminary trial balance of Suzzy and Daryl for the year ended Dec 31, as follows. Capital account 110,000 Profit and loss account at 1 January 50,000 Bank loan 30,458 Debtors and creditors 77,240 60,260 Cash in hand and bank overdraft 1,000 5,036 Stocks and work in progress at 1 January 108,000 Fixed assets at cost and depreciation provision at 31 December 161,879 60,943 Depreciation for the year 15,000 Purchased and sales 300,297 400,000 Returns 4,370 4,630 Discounts allowed and received 9,760 6,740 Wages and salaries (net) 12,146 Payments of PAYE income tax 5.988 Payments of National Insurance 4,766 Creditors for PAYE at 1 January 900 Proceeds of sale of fixed assets 2,000 Rent, rates and insurance 18,036 Postage, telephone and stationery 3,009 Repairs and maintenance 2,124 Advertising 4,876 Packaging materials 924 Motor expenses 2,000 Sundry expenses 1.000 Loan interest 4,000 Accrued expenses 6,478 Suspense account 1.030 737.445 737.445 When the bookkeeper discovered that the preliminary trial balance did not balance he made it do so by opening a suspense account and entering the amount on the appropriate side. A subsequent investigation shows the following mistakes have been made.

Answer 1

This question is related to rectification of errors. In these type of questions some errors are given and we have to rectify them by doing rectified journal entries.

The question have asked to prepare journal as well as ledgers. Firstly we will prepare journal.

STEP 1 : PREPARING JOURNAL

  

JOURNAL OF SUZZY AND DARYL VENTURES

FOR THE YEAR ENDING 31 DEC. 20__

DATE	PARTICULARS	F. NO.	DEBIT (DR.)	CREDIT(CR.)
	CAPITAL A/C DR TO LOAN FROM AMFIC		10000	10000
	BANK LOAN A/C DR TO ACCRUED INTEREST		458	458
	BANK CHARGES A/C DR TO BANK		1000	1000
	BANK A/C DR PROVISION FOR DEPRECIATION DR. TO FIXED ASSETS TO PROFIT AND LOSS A/C		2000 10943	11879 1064
	WAGES AND SALARIES DR. TO INCOME TAX TO EMPLOYEE CONT. TO  NATIONAL INSURANCE CONT.		7243	6088 1066
	EMPLOYER CONT. NATIONAL INS. DR. EMPLOYEE CONT. NATIONAL INS. DR. TO NATIONAL INS. CONT. PAYABLE		3000 1066	4066
	DISCOUNT ALLOWED A/C DR TO P AND L A/C		240	240
	P AND L A/C DR. TO DISCOUNT RECEIVED		260	260
	BAD DEBTS A/C DR. TO DEBTORS A/C		2000	2000
	P AND L A/C DR. TO BAD DEBTS A/C ( BEING BAD DEBTS WRITTEN OFF)		2000	2000
	DEBTORS A/C DR. BANK A/C DR. BAD DEBTS RECOVERED DR. TO BAD DEBTS RECOVERED TO P AND L		1000 1000 1000	1000 1000
	RETURN INWARD A/C DR. RETURN OUTWARD A/C DR TO P AND L A/C		630 630	1260
	P AND L A/C DR TO STATIONARY A/C		9	9
	PACKAGING MATERIAL A/C DR TO P AND L		76	76
	ADVERTISING A/ C DR. TO REPAIR AND MAINTAINANCE		124	124
	CASH A/C DR. TO INSURANCE A/C		36	36
	P AND L A/C DR. TO PURCHASE A/C		297	297
	P AND L A/C DR TO SUSPENSE A/C		1030	1030

  STEP 2: ENTER THOSE ENTRIES IN RESPECTED LEDGER A/C

CAPITAL A/C

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO LOAN FROM AMFIC	10000		BY BALANCE B/D	110000
	TO BALANCE C/D	100000
		110000			110000

LOAN FROM AMFIC A/C

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO BALANCE C/D	10000		BY CAPITAL A/C	10000

  BANK LOAN A/C

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO ACCRUED INTEREST	458		BY BALANCE B/D	30458

  ACCRUED EXPENSES A/C

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
				BY BALANCE B/D	6478
				BY BANK LOAN	458

  

BANK CHARGES A/C

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO BANK	1000

BANK A/C

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO BALANCE B/D ( BANK OD)	5036		BY BANK CHARGES	1000

PROVISION FOR DEP A/C

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO FIXED ASSET	10943		BY BAL B/D	60943
	TO FIXED ASSET	15000

FIXED ASSETS A/C

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO BALANCE B/D	161879		BY BANK A/C	2000
	TO P AND L	1064		BY PROV FOR DEP	10943
				BY PROV FOR DEP	15000

P AND L A/C

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO DISCOUNT RECEIVED	260		BY FIXED ASSET	1064
	TO BAD DEBTS A/C	2000		BY DISCOUNT ALLOWED A/C	240
	TO STATIONARY A/C	9		BY DEBTORS	1000
	TO PURCHASE A/C	297		BY RETURN INWARD A/C	630
	TO SUSPENSE A/C	1030		BY RETURN OUTWARD A/C	630
				BY PACKAGING MATERIAL A/C DR	76

WAGES AND SALARIES A/C

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO INCOME TAX	6088
	TO EMPLOYEE CONT.	1066
	TO P AND L	12146

INCOME TAX

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
				BY WAGES AND SALARIES A/C	6088

  EMPLOYEE CONT.

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO NATIONAL INS. CONT. PAYABLE	1066		BY WAGES AND SALARIES A/C	1066

EMPLOYER CONT. NATIONAL INS.  

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO NATIONAL INS. CONT. PAYABLE	3000

  NATIONAL INS. CONT. PAYABLE A/C

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO BALANCE C/D	4066		BY EMPLOYEE CONT.	1066
				BY EMPLOYER CONT. NATIONAL INS.	3000

DISCOUNT ALLOWED A/C

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO P AND L	240		BY BALANCE C/D	240

BAD DEBTS A/C

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO DEBTORS	2000		BY P AND L	2000

DEBTORS A/C

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO BAD DEBTS RECOVERED	1000		BY BAD DEBTS A/C	2000
	TO P AND L	1000

CASH A/C

DATE	PARTICULARS	AMOUNT(DR)	DATE	PARTICULARS	AMOUNT
	TO BALANCE B/D	1000
	TO INSURANCE A/C	36		BY BALANCE C/D	1036