Your bookkeeper extracted a trial balance on 31 December 2019 which failed to agree by 860, a
Question:
Your bookkeeper extracted a trial balance on 31 December 2019 which failed to agree by £860, a shortage on the credit side of the trial balance. A suspense account was opened for the difference.
In January 2020 the following errors made in 2019 were found:
(i) Sales day book had been undercast by £1,205.
(ii) Sales of £980 to I. Blane had been debited in error to I. Blank’s account.
(iii) Rent account had been undercast by £404.
(iv) Discounts allowed account had been overcast by £59.
(v) The sale of a computer at its carrying amount had been credited in error to the Sales account £200.
Required:
(a) Show the journal entries necessary to correct the errors.
(b) Draw up the suspense account after the errors described have been corrected.
(c) If the net profit had previously been calculated at £58,600 for the year ending 31 December 2019, show the calculations of the corrected net profit.
Step by Step Answer:
Frank Woods Business Accounting An Introduction To Financial Accounting
ISBN: 9781292365435
15th Edition
Authors: Alan Sangster, Lewis Gordon, Frank Wood