You have been provided with the following information relating
Debit balance in debtors account 31st January 2016 66,300.00
Credit balance in creditors account 31st January 2016 50,600.00
Credit balance on debtors ledger 724.00
Goods purchased on credit 257,919.00
Goods sold on credit 323,614.00
Cash received from debtors 299,149.00
Cash paid to suppliers 210,522.00
Discount received 2,663.00
Discount allowed 2,930.00
Cash purchases 3,627.00
Cash sales 5,922.00
Bad Debts written off 3,651.00
Interest on overdue account of customers 277.00
Returns outwards 2,926.00
Return inwards 2,805.00
Accounts settled by contra between debtors and creditors ledgers 1,106.00
Credit balances in debtors ledgers 31st December 2016 815.00
Debit balances in creditors ledger 31st December 2016 698.00
Required:
(a) Prepare the debtors ledger control account as at 31st December 2016 10 mks
(b) Prepare the creditors ledger control account as at 31st December 2016 10ks
a) Name and explain four types of errors which are not disclosed by the trial balance. (8 marks)
b) The trial balance of S Juma, a sole trader, did not balance on 30 April 2012. The difference was put in the suspense account. The final accounts which were then prepared showed a net profit of Sh. 64,000. During audit, the following errors were noted:
A loan from ABD Bank of Sh 10,000 was entered correctly in cash book but was not posted to the ledger.
A cheque of Sh. 4,000 for rent was not entered in the books.
Closing stock was overvalued by Sh 1,500.
Discount allowed of Sh 500 was entered in the discount-received account.
>span class="NormalTextRun SpellingErrorV2 SCXW149323164 BCX1">Sh 3,200.
Prepaid insurance of Sh 220 had been included in the profit and loss account.
Goods destroyed by fire amounting to Sh 12,000 were written off in the profit and loss account. However, the insurance company has agreed to compensate the full amount.
Required:
Journal entries to correct the errors. (8 marks)
Statement of corrected profit. (2 marks)
Suspense account. (2 marks)
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