The trial balance for Ms. Amanda, an IT contractor in Malaysia, for the year ended 31 December
Question:
The trial balance for Ms. Amanda, an IT contractor in Malaysia, for the year ended 31 December 2020 does not balance. Ms. Amanda had identified the following issues but is unsure how to account for them and has approached you for help and guidance in rectifying the issues:
i. Discount received of RM210 has been debited to the discount allowed account.
ii. A rent expense of RM1,000 paid during the year was recorded by debiting the rates account.
iii. A RM2,000 payment in relation to insurance expenses has been debited to insurance and debited to trade payables in error. The balancing entry was posted to the suspense.
iv. The total of the purchases daybook has been carried forward as RM12,348, whereas the correct amount wasRM12,843. The correct amount has been posted to trade payables.
v. Ms. Amanda personally paid RM10,000 towards the purchase of a motor vehicle for her business. The following entry was made in her financial statements: Debit Bank RM10,000 Credit Motor VehicleRM10,000
vi. A prepayment of rent amounting to RM8,000 was correctly entered in the bank account and was also credited to rent payable. The balancing entry was posted to the suspense. Ms. Amanda included a suspense debut balance of RM2,075 to balance the trial balance.
vii. Deposit interest received and banked of RM800 was included in finance costs.
(a) Prepare journal entries for Ms. Amanda to record and correct relevant transactions from the above information for the financial statements for the year ending 31 December 2020.
(b) Prepare the suspense account for Ms. Amanda in relation to the above transactions
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver