Mark Brown operates a Nursery in her district and has been having difficulties preparing her accounts for the year-end financial statements. The Trial Balance did not balance as the debits have exceeded the credits by $1780. A Suspense Account was open for the difference. The following errors were found after closer inspection: i. The Purchases Day Book had been overcast by $1100 ii. $2350 received from the sale of old furniture had been entered in the Sales Account. iii. A cheque of $1950 from T. Cruise was accidentally credited to T. Crane’s account. iv. A private purchase of $2400 had been included in the business purchases. v. Bank charges of $1220 entered in the Cash Book have not been posted to the Bank Charges Account. vi. A sale of goods to S. Black for $2300 was correctly entered in the Sales Day Book but entered in the personal account as $4200 Write up the Suspense Account to clear the difference. Show the journal entries necessary to correct the errors The net profit previously calculated for the year was $29 500. Show your calculations of the corrected net
Mark Brown operates a Nursery in her district and has been having difficulties preparing her
accounts for the year-end financial statements. The
have exceeded the credits by $1780. A Suspense Account was open for the difference. The
following errors were found after closer inspection:
i. The Purchases Day Book had been overcast by $1100
ii. $2350 received from the sale of old furniture had been entered in the Sales Account.
iii. A cheque of $1950 from T. Cruise was accidentally credited to T. Crane’s account.
iv. A private purchase of $2400 had been included in the business purchases.
v. Bank charges of $1220 entered in the
Charges Account.
vi. A sale of goods to S. Black for $2300 was correctly entered in the Sales Day Book but
entered in the personal account as $4200
Write up the Suspense Account to clear the difference.
Show the
The net profit previously calculated for the year was $29 500. Show your calculations of the corrected net profit
The suspense account comes into existence when debit and credit balances in trial balance are not equal.
Step by step
Solved in 2 steps
