Balance.Question eleven:Mr. Amani has been workking as a retail trader and his wife was the one whokeeps thae books of account. Of recent, they decided to hire an accountant. TheFinancial Statement for the period ended 31st December 2016 and the books ofaccount were handed over to this ncw accountant. The profit or loss accountshowed a net profit of TZS.15,667,000. On reviewing the books and theStatement of Profit or Loss, the accountant discovered the following:(i) Drawings of TZS.2,200,000 were included as miscellaneous expenses(ii) Rent expenses included rate for the half year ending 3lst May 2017 ofTZS.750,000(iii) Motor van expensess do not include a repair carried out in December 2016but not yet invoiced. It is expected to cost TZS.258,000(iv) Stationery purchases of TZS.780,000 were expensed but did not take intoconsideration stationery stocks at 31st December 2015 of TZS, 105,000 and at31st December 2016 of TZS.143,000(v) Debtors amounted to TZS.3,450,000 but 10% of them seemsuncollectible. No provision was made in the books.00pto beamountedTZS.350,000 andDiscounts allowed and receivedTZS.650,000 respectively. No entry was made in the books.Required: (a) Prepare journal entries necessary to correct the above errors.(b) Prepare a statement that adjust the net profit figure to reflect the correctamount.Investment, CPA(T), BAC (0655 170338)Page 10 Balance.Question eleven:Mr. Amani has been workking as a retail trader and his wife was the one whokeeps thae books of account. Of recent, they decided to hire an accountant. TheFinancial Statement for the period ended 31st December 2016 and the books ofaccount were handed over to this ncw accountant. The profit or loss accountshowed a net profit of TZS.15,667,000. On reviewing the books and theStatement of Profit or Loss, the accountant discovered the following:(i) Drawings of TZS.2,200,000 were included as miscellaneous expenses(ii) Rent expenses included rate for the half year ending 3lst May 2017 ofTZS.750,000(iii) Motor van expensess do not include a repair carried out in December 2016but not yet invoiced. It is expected to cost TZS.258,000(iv) Stationery purchases of TZS.780,000 were expensed but did not take intoconsideration stationery stocks at 31st December 2015 of TZS, 105,000 and at31st December 2016 of TZS.143,000(v) Debtors amounted to TZS.3,450,000 but 10% of them seemsuncollectible. No provision was made in the books.00pto beamountedTZS.350,000 andDiscounts allowed and receivedTZS.650,000 respectively. No entry was made in the books.Required: (a) Prepare journal entries necessary to correct the above errors.(b) Prepare a statement that adjust the net profit figure to reflect the correctamount.Investment, CPA(T), BAC (0655 170338)Page 10

Rectification is a process to be followed in case any error or omission of transaction is deducted…

Question eleven: Mr. Amani has been working as a retail trader and his wife was the one who keeps the books of account. Of recent, they decided to hire an accountant. The Financial Statement for the period ended 31 st December 2016 and the books of account were handed over to this new accountant. The profit or loss account showed a net profit of TZS.15,667,000. On reviewing the books and the Statement of Profit or Loss, the accountant discovered the following: (i) Drawings of TZS.2,200,000 were included as miscellaneous expenses (ii) Rent expenses included rate for the half year ending 31st May 2017 of TZS.750,000 (iii) Motor van expenses do not include a repair carried out in December 2016 but not yet invoiced. It is expected to cost TZS.258,000 (iv) Stationery purchases of TZS.780,000 were expensed but did not take into consideration stationery stocks at 31st December 2015 of TZS. 105,000 and at 31st December 2016 of TZS.143,000 (v) Debtors amounted to TZS.3,450,000 but 10% of them seems to be uncollectible. No provision was made in the books. (vi) Discounts TZS.650,000 respectively. No entry was made in the books. Required: (a) Prepare journal entries necessary to correct the above errors. (b) Prepare a statement that adjust the net profit figure to reflect the correct allowed and received amounted to TZS.350,000 and amount.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q