1. The trial balance of Palma Sutra Enterprise did not balance, with a difference of RM14,650 posted to a suspense account. Several errors were later discovered in the accounts. Journal entries will be made to correct the errors, and an adjusted balance sheet will be prepared.
2. The following errors were found: a sales amount was recorded in the wrong debtor's account; an expense was incorrectly capitalized; a purchase amount was entered incorrectly in the creditors account; and some transactions were only partially recorded or recorded twice. Journal entries will correct these errors.
3. For Aznur Enterprise, errors were found where amounts were recorded incorrectly, transactions were missing entries, and some amounts were credited
1. The trial balance of Palma Sutra Enterprise did not balance, with a difference of RM14,650 posted to a suspense account. Several errors were later discovered in the accounts. Journal entries will be made to correct the errors, and an adjusted balance sheet will be prepared.
2. The following errors were found: a sales amount was recorded in the wrong debtor's account; an expense was incorrectly capitalized; a purchase amount was entered incorrectly in the creditors account; and some transactions were only partially recorded or recorded twice. Journal entries will correct these errors.
3. For Aznur Enterprise, errors were found where amounts were recorded incorrectly, transactions were missing entries, and some amounts were credited
1. The trial balance of Palma Sutra Enterprise did not balance, with a difference of RM14,650 posted to a suspense account. Several errors were later discovered in the accounts. Journal entries will be made to correct the errors, and an adjusted balance sheet will be prepared.
2. The following errors were found: a sales amount was recorded in the wrong debtor's account; an expense was incorrectly capitalized; a purchase amount was entered incorrectly in the creditors account; and some transactions were only partially recorded or recorded twice. Journal entries will correct these errors.
3. For Aznur Enterprise, errors were found where amounts were recorded incorrectly, transactions were missing entries, and some amounts were credited
1. The trial balance of Palma Sutra Enterprise did not balance, with a difference of RM14,650 posted to a suspense account. Several errors were later discovered in the accounts. Journal entries will be made to correct the errors, and an adjusted balance sheet will be prepared.
2. The following errors were found: a sales amount was recorded in the wrong debtor's account; an expense was incorrectly capitalized; a purchase amount was entered incorrectly in the creditors account; and some transactions were only partially recorded or recorded twice. Journal entries will correct these errors.
3. For Aznur Enterprise, errors were found where amounts were recorded incorrectly, transactions were missing entries, and some amounts were credited
Download as DOC, PDF, TXT or read online from Scribd
Download as doc, pdf, or txt
You are on page 1/ 6
1.
The following trial balance has been drawn up for Adam Gemilang Enterprise on 30 September 2015:
RM RM Land and buildings 117 000 Equipment 73 000 Provision for depreciation: Land and buildings 20 300 Equipment 28 460 Ending stock 16 300 Bank 5 350 Debtors / Creditors 25 500 22 140 Loan 25 000 Provision for doubtful debts 510 Capital 125 790 Net profit 39 000 Drawings 22 000 Suspense account 2 050
261 200 261 200
Since the preparation of the above trial balance, the following errors and omissions have been identified: (i) A purchase of RM1 470 from Belia Megah Bhd., had been received on 30 September 2015 and included in the stock figures on that date but the invoice had not been entered in the purchase book. (ii) A photocopier was bought on 1 October 2014 for use in the business. The cost of RM4 000 has been debited to the purchases account. (iii) Provision for depreciation had not been made for the new photocopier referred to in item (ii). The depreciation is to be 20% on cost. (iv) A credit note for RM125 received from supplier, Wawasan Pak Ngah Sdn. Bhd., was credited in the return outwards account and credited to Wawasan Pak Ngah Sdn. Bhd.’s account. (v) Owner’s private house electricity bill for RM560 has been paid by the business and being debited in the electricity charges account. (vi) Creditor’s balance includes an invoice which was mistakenly recorded as RM7 500. The right amount is RM5 700. (vii) Purchases by cheque amounting RM1 000 has been entered on the debit side in the cash book and posted to the credit side of purchase account.
Required: (a) Prepare the journal entries to record the adjustments for the above items. (b) Prepare the Statement of Financial Position as at 30 September 2015 after corrections of errors. 2. The trial balance of Muhibah Enterprise as at 31 July 2015 showed a difference of RM3 700. The difference was posted to suspense account. The following balances were extracted from the books. Trial Balance of Muhibah Enterprise as at 31 July 2015 RM RM Building 131 500 Motor vehicles 28 900 Furniture 13 000 Accumulated depreciation - Motor vehicles 5 6200 - Furniture 11 560 Stocks 13 500 Debtors 35 000 Provision for doubtful debt 900 Cash in bank 20 980 Cash in hand 9 100 Prepaid expenses 500 Capital 80 200 Bank loan 76 000 Creditors 18 500 Net profit 14 620 Suspense account 3 700 257 080 257 080
The following errors and omissions were discovered:
(i) Credit sales of RM600 to Agustin Enterprise had been mistakenly debited to Agustina Sdn. Bhd. (ii) Painting of office building, amounting RM1 500 had been charged to building account. (iii) Credit purchases of RM14 800 had been correctly debited to the purchases account but the credit entry had been wrongly entered in the creditor account as RM18 400. (iv) Payment of commission expenses amounted RM1 200 by cheque was correctly entered in the bank account, but entered as RM2 200 in the commission account. (v) Cash payment for advertising amounted to RM880 was entered in the cash account only. (vi) Cheque amounting RM330 received from Amsyar was debited to Amsyar’s account and credited to bank account. (vii) Drawing of cash for family expenses amounting RM400. This transaction was completely omitted. (viii) Cheque for payment of electricity expenses amounting RM110 was credited in both accounts.
Required: (a) Show the journal entries necessary to correct the above errors. (Narration is not required) (b) Prepare the suspense account. (c) Calculate the adjusted net profit. (d) Identify the types of errors in (i) – (iv) above.
3. The trial balance of Aznur Enterrpise failed to agree and the difference has been entered into a Suspense account. The following is the draft Statement of Financial Position as at 31 August 2015:
Aznur Enterprise Statement of Financial Position as at 31 August 2015 (draft) RM RM RM Non-current Assets Owner’s equity Shop lot 90 000 Capital 140 000 Equipment 40 000 Net profit 15 000
The follwoing errors have been discovered during the torough checking on the accounting records: (i) Return inwards amounting RM130 from Anim has been recorded as RM13 in the Return inwards account. (ii) Payment of rental amounting RM2 200 has been debited in the Rental Account but no corresponding entry has been entered in the other account. (iii) The purchase of stationeries of RM181 cash has been debited in Stationery account as RM18. (iv) Purchase of equipment of RM1 500 on 1 September 2014 has been debited in the Purchase account as RM2 500. Annual depreciation rate for equipment is 20% on cost. (v) Discount allowed of RM90 has been wrongly credited in the Discount received account. (vi) Cash sales amounting RM1 600 has been entered in the Sales account only. (vii) Motor vehicle expenses amounting RM40 has been mistakenly entered twice in the cash account. However, the posting in the Motor vehicle expenses account showed the correct entry. (viii) A payment to a creditor of RM831 has been credited in both Creditor and Bank account. Required: (a) Show the journal entries necessary to correct the above errors. (b) Prepare the suspense account. (c) Prepare the Statement of Financial Position (after adjustments) as at 31 August 2015.
4. The trial balance of Palma Sutra Enterprise showed a difference of RM14 650. This was posted to a suspense account so that the accounts for the year ended 31 March 2015 could be prepared. The following balance sheet was produced:
Palma Sutra Enterprise
Statement of Financial Position as at 31 March 2015
RM RM RM Fixed assets Cost Accumulated Net Book Depreciation Value Building (Freehold) 60,000.00 - 60,000.00 Motor vehicles 25,000.00 11,935.00 13,065.00 Fixtures and fittings 1,500.00 750.00 750.00 86,500.00 12,685.00 73,815.00
Current assets Stocks 75,410.00 Debtors 37,140.00 Cash 75.00 112,625.00
Suspense account 14,650.00
201,090.00 Financed by:
Capital 125,000.00 Profit 33,500.00
Current liabilities Trade creditors & accrued charges 41,360.00 Bank overdraft 1,230.00 42,590.00
201,090.00
On checking the books to eliminate the suspense account you find the following errors: (i) The debit side of the bank column in the cash book is understated by RM10 000. (ii) A payment of RM5 000 by cheque to a creditor has been entered in the cash book but has not been posted to the ledger. (iii) Stationery amounting RM100 has been incorrectly posted to the stationery account as RM1 000, while transport charge of RM450 has been recorded as RM45 in the carriage account. However, both transactions has been correctly entered in the bank column of the cash book. (iv) Rent received RM45 was posted twice to the ledger from the cash book. (v) The debit side of the debtors account was understated by RM100. (vi) Bank charges of RM3 250 had not been entered in the cash book. (vii) Depreciation of motor vehicle vehicles was undercharged by RM500.
Required: (a) Prepare the journal entries to eliminate balance on the suspense account. (b) Prepare the suspense account. (c) Prepare the Statement of Financial Position of Palma Sutra Enterprise as at 31 March 2015 after correcting the above errors. Show workings on adjustments made apart from those related to the suspense accounts.
5. The trial balance of Salam Trading as at 31 December 2015 were found not
balanced and the debit side exceeds the credit by RM1 624. The difference is to be entered into the Suspense Account. In reviewing the business transactions, there were some errors identified as follows: (i) Payment of rental expense RM1 500 by cash has been debited in the Rent Account only. (ii) Purchase of office equipment RM2 500 was debited to the Office Equipment Account as RM2 050. Entry in the cash account has been correctly entered. (iii) Discount Allowed of RM100 was wrongly credited in the Discount Received Account. However, the correct entry has been made in the customer’s account. (iv) Purchases return of RM160 by Anwar was mistakenly credited as RM106 in the Return Outward Account. (v) Sundry expenses of RM80 have been credited twice in the Cash Account. However, entry made in the Sundry Expenses Account was correctly done. (vi) Cash sales of RM800 had been recorded in the Cash Account only. (vii) Cash purchases amounting RM2 000 were entered in the ledger by debiting the Cash Account and crediting the Purchases Account.
Required: (a) Prepare journal entries to correct the above errors. (b) Prepare the Suspense Account to show the necessary adjustments. (c) If the net profit before correction of errors is RM45 890, calculate the net profit after adjustments in (a) above. (d) State the types of errors for errors (iv) to (vii) above.
