Question seventeen: The trial balance as at 30 April 20X7 of Timber Products Limited was balanced by the inclusion of the following debit balance: Difference on trial balance suspense account shs.2,513. Subsequent investigations revealed the following errors: (i) Discounts received of shs.324 in January 20X7 have been posted to the debit of the discounts allowed account. (ii) Wages of shs.2,963 paid in February 20X7 have not been posted from the cash book. (iii) A remittance of shs.940 received from K Mitcham in November 20X6 has been posted to the credit of B Mansell Limited. (iv) In December 20X6, the company took advantage of an opportunity to purchase a large quantity of stationery at a bargain price of shs.2,000. No adjustments have been made in the accounts for the fact that three-quarters, in value, of this stationery was in stock on 30 April 20X7. (v) A payment of shs.341 to J Winters in January 20X7 has been posted in the personal account as shs.143. (vi) A remittance of shs.3,000 received from D North, a credit customer, in April 20X7 has been credited to sales. The draft accounts for the year ended 30 April 20X7 of Timber Products Limited show a net profit of shs.24,760. Required: (a) Prepare the difference on trial balance suspense account showing, where appropriate, the entries necessary to correct the accounting errors. (b) Prepare a computation of the corrected net profit for the year ended 30 April 20X7 following corrections for the above accounting errors.
Question seventeen: The trial balance as at 30 April 20X7 of Timber Products Limited was balanced by the inclusion of the following debit balance: Difference on trial balance suspense account shs.2,513. Subsequent investigations revealed the following errors: (i) Discounts received of shs.324 in January 20X7 have been posted to the debit of the discounts allowed account. (ii) Wages of shs.2,963 paid in February 20X7 have not been posted from the cash book. (iii) A remittance of shs.940 received from K Mitcham in November 20X6 has been posted to the credit of B Mansell Limited. (iv) In December 20X6, the company took advantage of an opportunity to purchase a large quantity of stationery at a bargain price of shs.2,000. No adjustments have been made in the accounts for the fact that three-quarters, in value, of this stationery was in stock on 30 April 20X7. (v) A payment of shs.341 to J Winters in January 20X7 has been posted in the personal account as shs.143. (vi) A remittance of shs.3,000 received from D North, a credit customer, in April 20X7 has been credited to sales. The draft accounts for the year ended 30 April 20X7 of Timber Products Limited show a net profit of shs.24,760. Required: (a) Prepare the difference on trial balance suspense account showing, where appropriate, the entries necessary to correct the accounting errors. (b) Prepare a computation of the corrected net profit for the year ended 30 April 20X7 following corrections for the above accounting errors.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
100%
Transcribed Image Text:20A8.
Question seventeen:
The trial balance as at 30 April 20X7 of Timber Products Limited was balanced
by the inclusion of the following debit balance: Difference on trial balance
suspense account shs.2,513. Subsequent investigations revealed the following
errors:
(i) Discounts received of shs.324 in January 20X7 have been posted to the
debit of the discounts allowed account.
(11) Wages of shs.2,963 paid in February 20X7 have not been posted from the
cash book.
(iii) A remittance of shs.940 received from K Mitcham in November 20X6 has
been posted to the credit of B Mansell Limited.
(iv) In December 20X6, the company took advantage of an opportunity to
purchase a large quantity of stationery at a bargain price of shs.2,000. No
adjustments have been made in the accounts for the fact that three-quarters,
in value, of this stationery was in stock on 30 April 20X7.
(v) A payment of shs.341 to J Winters in January 20X7 has been posted in the
personal account as shs.143.
(vi) A remittance of shs.3,000 received from D North, a credit customer, in April
20X7 has been credited to sales.
The draft accounts for the year ended 30 April 20X7 of Timber Products
Limited show a net profit of shs.24,760.
Required:
(a) Prepare the difference on trial balance suspense account showing, where
appropriate, the entries necessary to correct the accounting errors.
(b) Prepare a computation of the corrected net profit for the year ended 30 April
20X7 following corrections for the above accounting errors.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education