Belle does not use control accounts. At the most recent year end the Trial Balance did...
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Belle does not use control accounts. At the most recent year end the Trial Balance did not balance as the credit total exceeded the debit total by RM541. A suspense account was opened and this balance was treated as a current asset when the draft accounts were prepared. The accounts showed a gross profit of RM42,350 and a net profit of RM13,400. The accountant has now found the following errors: (a) (b) (c) (d) A sales return of RM60 had been credited to the customer's account and credited to Sales Returns account. Postage expenses of RM87 had been correctly entered in the Bank account but entered as RM78 in Postage expenses account. A customer, Sarah. Owing RM240, had paid her account less 5% cash discount. Sarah's account had been credited with RM228, but no entry has been made in the bank account and the discount remained unrecorded. RM8,400, including RM150 for the license and RM 350 for insurance, was paid to the supplier of a new vehicle. The motor Vehicles account had been debited with RM8,400 and the bank account credited with the same amount. A full year's depreciation of 25% had been charged on the cost of all vehicles. (e) The petty cash account had been omitted from the Trial Balance. When all the above errors had been corrected the Suspense Account was eliminated. Required: (a) (b) Prepare the suspense accounts of Belle. Calculate the revised figure of (i) Gross Profit (ii) Net Profit (7 marks) (2 marks) Belle does not use control accounts. At the most recent year end the Trial Balance did not balance as the credit total exceeded the debit total by RM541. A suspense account was opened and this balance was treated as a current asset when the draft accounts were prepared. The accounts showed a gross profit of RM42,350 and a net profit of RM13,400. The accountant has now found the following errors: (a) (b) (c) (d) A sales return of RM60 had been credited to the customer's account and credited to Sales Returns account. Postage expenses of RM87 had been correctly entered in the Bank account but entered as RM78 in Postage expenses account. A customer, Sarah. Owing RM240, had paid her account less 5% cash discount. Sarah's account had been credited with RM228, but no entry has been made in the bank account and the discount remained unrecorded. RM8,400, including RM150 for the license and RM 350 for insurance, was paid to the supplier of a new vehicle. The motor Vehicles account had been debited with RM8,400 and the bank account credited with the same amount. A full year's depreciation of 25% had been charged on the cost of all vehicles. (e) The petty cash account had been omitted from the Trial Balance. When all the above errors had been corrected the Suspense Account was eliminated. Required: (a) (b) Prepare the suspense accounts of Belle. Calculate the revised figure of (i) Gross Profit (ii) Net Profit (7 marks) (2 marks)
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Related Book For
Accounting For Cambridge International AS And A Level
ISBN: 9780198399711
1st Edition
Authors: Jacqueline Halls Bryan, Peter Hailstone
Posted Date:
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