Question

Brandy prepared column total was $79 500 whereas the credit column total was $78 500. The difference was placed in a suspense account. He discovered the following a trial balance from his ledger on 31 December 2016. The debit errors in his books: An invoice for $4000 sent to Green, a credit customer had been completely omitted from the books. 1 A page from the Sales day book sub-totaling $25200 has been incorrectly carried forward as $22500. 2. The purchase of office equipment for $10400 had been debited to office expenses account. Depreciation of 5% was not provided on this equipment. 3 4. A purchase of office stationery, $710, had been debited to purchases account. An amount of $180 relating to bank charges appeared in the cash book but was not posted elsewhere. 5. A balance of $560 on D. Blue's account had been written off correctly to the bad debts account but had not been entered in the personal account. 6. 7 Commission paid $1040 had been credited to Commission received account. (a) Prepare journal entries to correct the above errors [13 marks] [6 marks] (b) Write up the suspense account. Show a statement of corrected net profit (the net profit before the errors (c) were discovered was $ 36 800) [6 marks] LO CO

Answer 1

F4.050 Pr 17een To C Bei Sales A1c emor rectifed) 2) Suspense Are T27,50 To Salus c $2700 emr retifed) $10400 (3) equipmud dfce tapenses Are To eyo rechified 6yresidion ffice spmet Ceeprecialkin oi dad on 520 ATC S20 To oice Statiney Arc r To furuhapeo c s7,10 ,o eror rehfd cicinj buuk chaupes Ae To Sutpanre Az eoTor rectihsd) (5) $1,80 cbeing Suspeme Are D. Bua To rectitied Commi'ssin Paud e Cani'ssin Keduad Ahe Ps 41o4 To Suspensete 080

suspeme Ale By 6al6ld By bauk chays By Gmmission (5) To Saleg aete 560 180 To 6lue Paid By commmi'ssin Reciewad 1,040 3 260 326 o Statement q N et Potit N ofit befo Addl-Saleg Salus Pras era 4.36800 4,000 re Adld C22 $2,700 (3 Add ce expenses educsod 10, y00 520) Lessi qrecialin ut 5) Less ouk chapes uoguisd No 4180 No 2080) Commissim