Chi Knitwear is an old fashioned firm with a hand-written set of books. A trial balance is extracted at the end of eachmonth, and an income statement and statement of financial position are computed. This month however the trial balance

will not balance, the credits exceeding debits byK1,536.

You are asked to help and after inspection of the ledgers discover the following errors.

(a) A balance ofK87 on a receivables account has been omitted from the schedule of debtors, the total of which wasentered as receivables in the trial balance.

(b) A small piece of machinery purchased forK1,200 had been written off to repairs.

(c) The receipts side of the cash book had been undercast byK720.

(d) The total of one page of the sales day book had been carried forward asK8,154, whereas the correct amount wasK8,514.

(e) A credit note forK179 received from a supplier had been posted to the wrong side of his account; the schedule ofpayables balances was used as the payables figure in the trial balance.

(f) An electricity bill in the sum ofK152, not yet accrued for, is discovered in a filing tray.

(g) Mr Smith whose past debts to the company had been the subject of a provision, at last paidK731 to clear hisaccount. His personal account has been credited but the cheques has not yet been entered in the cash account.

Required

(a)Prepare Journal enteries,with narration,for the items (a) to (g) above (14 Marks)

(b)Write up the suspense account to clear the trial balance difference.(6 Marks)

(c) Describe any five errors that can be revealed by trial balance(5 Marks)(Total 25 Marks)