Aku, the accountant of Alpha Ltd has prepared the company's half-yearly accounts to 31 March 2000. Unfortunately, there is a difference on the Trial Balance and Aku has entered this in a Suspense account to enable him to complete the accounts. draft Profit and Loss Account for the six months to 31 March 2000 shows the following: Gross profit $130 000 Net profit $40 000 The draft Balance Sheet at 31 March 2000 shows Net Working Capital (Current Assets less Current Liability )of $107 836. This does not include the balance on the Suspense account. After completing the draft accounts Aku found several errors in the books; details of these are shown below: 1. An item for $1 076 in the Sales Day Book has been entered in Abel's account in the Sales Ledger as $1 760. 2. At 31 March 2000, Sara's account in the Sales Ledger showed a debit balance of $900. There was also an account for her in the Purchase Ledger and it showed a credit balance of $650. In offsetting these balances, the ledger clerk had debited Sara's account in the Sales Ledger with $650 and credited her account in the Purchases Ledger with the same amount. 3. A purchase of goods costing $1 500 had been credited to the supplier's account in the Purchases Ledger but no other entry had been made In the books. 4. A credit balance of $480 in the Sales Ledger had been included in the list of debtors as a debit balance. 5. A sales invoice for $1 070 sent to Charley had been entered in the Sales Day Book as $1 700. 6. Discounts receivable of $300 in January 2000 had been debited in the Discounts Allowed account. Discounts allowable of $800 for the same month had been credited in the Discounts Received account. 7. Some goods have been sent to Pomeroy, a customer, and invoiced to him for $2 450. The mark-up on these goods was 40 %. Pomeroy has notified Alpha Ltd on 30 March 2000 that he has not ordered the goods and is returning them. No entries regarding the return of these goods have been made in the books.

REQUIRED (a) Prepare the journal entries required to correct each of the errors detailed above (Narratives are not required.) (b) Prepare the Suspense account showing clearly the difference on the trial balance before the errors have been corrected.

(c) Calculate the following after the errors shown above have been corrected. I. Gross profit II. Operating profit III. Net working capital.

- we need to create suspense account.

- first we need to identify errors, then remove that errors so we will get suspense account.