Question
A trial balance for the year ended 31 December 2019 was prepared for a business. There was a shortage of Tshs.2,920,000 in the credit total.
A trial balance for the year ended 31 December 2019 was prepared for a business. There was a shortage of Tshs.2,920,000 in the credit total. A suspense account was opened for the difference. During 2010, the following errors made in 2019 were located.
(i) An amount of Tshs.550,000 received from the sale of old office equipment (with a cost of Tshs.4,600,000 and a zero net book value) had been entered in the sales account. No other entries had been had been made.
(ii) The purchases daybook had been overcast by Tshs.600,000. (iii) A private purchase by the owner of Tshs.1,150,000 had been included in business purchases.
(iv) Bank charges of Tshs.380,000 entered in the cash book had not been posted to the bank charge account.
v) A sale of good to C Chow amounting to Tshs.6,900,000 had been correctly entered in the sales book but posted to the personal account as Tshs.9,600,000. Required:
(a) Show the journal entries to correct the errors. (Narrations are not required.)
(b) Draw up the suspense account.
(c) The net profit for 2019 was originally calculated as Tshs.113,700,000. Recalculate the correct figure and show the workings.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started