Lee's trial balance at 30 June 2004 fails to agree and he places the difference in a

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Lee's trial balance at 30 June 2004 fails to agree and he places the difference in a Suspense account. Lee then discovers the following errors. 

1. The total of the sales journal for one month was $5430. This had been posted to the Sales account as $5340. 

2. An invoice for $150 for the purchase of stock from Bilder had been entirely omitted from the books. 

3. A cheque for $75 from Doyle, a customer, had been credited to his account as $57. 

4. A debt of $50 in the sales ledger had been written off as bad but no entry had been made in the Bad debts account. 

5. An improvement to a machine at a cost of $400 had been debited to Machinery Repairs account. (Lee depreciates machinery by the straight-line method over 10 years; a full year's depreciation is calculated for the year of purchase.)


Required 

(a) Prepare the Suspense account in Lee's ledger showing clearly the difference on the trial balance at 30 June as the first entry and the entries required to adjust the errors. 

(b) Prepare journal entries for errors 2 and 5. (Narratives are not required.) 

Lee's draft Profit and Loss Account for the year ended 30 June 2004 showed a net profit of $3775. 

(c) Calculate the corrected net profit for the year ended 30 June 2004.

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