ine Trial Balance of TRY HARD CO. LTD. for the year ended 31 December, 20X4 failed...
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ine Trial Balance of TRY HARD CO. LTD. for the year ended 31" December, 20X4 failed to agree and the difference of GH¢810 was debited to a Suspense Account. Accounts were prepared on the basis of the Trial Balance and showed a Net Profit of GH$20,000. The following errors were subsequently discovered: (i) (ii) (iii) (iv) € The Sales Day Book had been overcast by GH¢90. Discounts allowed of GH¢612 correctly entered in the Sales Ledger had been posted to the wrong side of the discounts allowed account in the nominal ledger; Cheque received from Doris, a customer amounting to GH¢182 was entered correctly in the Cash Book but had been credited to the personal account as GH 128 A credit balance of GH¢270 on the personal account of Sadia in the Bought Ledger had been omitted from the trial balance; A credit note of GH¢126 for goods returned by Ben, a customer, had been entered twice in the Returns Inwards Book and credited twice to the personal account of the customer; (vii) A payment of GH¢390 on 30th December 20X4 for repairs of Motor Vehicles had been debited to the Motor Vehicles Account; (viii) Part of the Company's premises had been let as from 1st December 20X4, at a monthly rent of GH¢60. On 1st December, the tenant paid three months' rent in advance. This amount had been entered in the Cash Book, but no other entry had been made in any other account. After discovery and correction of the above errors, the Suspense Account was closed and the Trading and Profit and Loss Account redrafted. You are required to: (a) Write up the journal entries to correct the above errors. (b) Show the suspense account. (c) Calculate the amount of the Net Profit after correcting the above errors. (SSSCE) ine Trial Balance of TRY HARD CO. LTD. for the year ended 31" December, 20X4 failed to agree and the difference of GH¢810 was debited to a Suspense Account. Accounts were prepared on the basis of the Trial Balance and showed a Net Profit of GH$20,000. The following errors were subsequently discovered: (i) (ii) (iii) (iv) € The Sales Day Book had been overcast by GH¢90. Discounts allowed of GH¢612 correctly entered in the Sales Ledger had been posted to the wrong side of the discounts allowed account in the nominal ledger; Cheque received from Doris, a customer amounting to GH¢182 was entered correctly in the Cash Book but had been credited to the personal account as GH 128 A credit balance of GH¢270 on the personal account of Sadia in the Bought Ledger had been omitted from the trial balance; A credit note of GH¢126 for goods returned by Ben, a customer, had been entered twice in the Returns Inwards Book and credited twice to the personal account of the customer; (vii) A payment of GH¢390 on 30th December 20X4 for repairs of Motor Vehicles had been debited to the Motor Vehicles Account; (viii) Part of the Company's premises had been let as from 1st December 20X4, at a monthly rent of GH¢60. On 1st December, the tenant paid three months' rent in advance. This amount had been entered in the Cash Book, but no other entry had been made in any other account. After discovery and correction of the above errors, the Suspense Account was closed and the Trading and Profit and Loss Account redrafted. You are required to: (a) Write up the journal entries to correct the above errors. (b) Show the suspense account. (c) Calculate the amount of the Net Profit after correcting the above errors. (SSSCE)
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Related Book For
Auditing Assurance Services and Ethics in Australia an Integrated Approach
ISBN: 978-1442539365
9th edition
Authors: Alvin A Arens, Peter J. Best, Greg Shailer, Brenton Fiedler
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