Boulder's trial balance at 31 March 2004 did not balance and the difference was entered in a Suspense account. Boulder
Boulder's trial balance at 31 March 2004 did not balance and the difference was entered in a Suspense account. Boulder does not maintain Control accounts. The following information was later discovered.
1. A receipt of $313 from Head, a customer, has been entered correctly in the cash book but has been debited to Head's account in the sales ledger as $331.
2. Goods sold to Joey for $100 have been returned by him and entered correctly in the Sales Returns account. No entry has been made for the return in Joey's account in the sales ledger.
3. The purchase of a second-hand motor vehicle costing $3000 has been debited to the Motor Vehicle Expenses account.
4. The total of the Discount Allowed column in the cash book has been overcast by $300.
5. A dishonest employee has stolen $700 from the business and the cash will not be recovered. No entry to record the theft has been made in the accounts.
(a) Prepare journal entries to correct errors 1 to 5. Narratives are required.
(b) Prepare a Suspense account commencing with the trial balance difference. The working capital shown in the Balance Sheet at 31 March 2004 before the errors were corrected was $2400.
(c) Calculate the working capital after the errors have been corrected.
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