The trial balance of The White Ribbon failed to agree, and the difference was posted to a suspense account. The Income Statement then showed a net loss $15,800. A subsequent audit revealed the following accounting errors a) The loan interest of $25,000 was paid by cheque and correctly posted in the cashbook, but was debited to the loan account b) An invoice for credit sales of $70,000 was posted in the sales ledger but was not posted in the sales account c) Office expense of $30,000 paid by cheque and correctly posted in the cashbook, was debited to the Insurance account d) The Closing Stock valued at $60,500 was taken as $44,500 e) Cash donations of $22,500 was posted to the books as $55,200 f) The Opening Stock valued at $35,000 was taken as $55,000 g) Building repairs paid for $40,000 by cheque was correctly recorded in the cashbook but was debited to the building account Required 1. Write up the General Journal to note the corrections required for the above errors Narratives are NOT required 3. Prepare the Statement of Adjusted Net Income 4. Identify and briefly explain the errors incurred at (c.), (e), and (g) above
The
a) The loan interest of $25,000 was paid by cheque and correctly posted in the
b) An invoice for credit sales of $70,000 was posted in the sales ledger but was not posted in the sales account
c) Office expense of $30,000 paid by cheque and correctly posted in the cashbook, was debited to the Insurance account
d) The Closing Stock valued at $60,500 was taken as $44,500
e) Cash donations of $22,500 was posted to the books as $55,200
f) The Opening Stock valued at $35,000 was taken as $55,000
g) Building repairs paid for $40,000 by cheque was correctly recorded in the cashbook but was debited to the building account
Required
1. Write up the General Journal to note the corrections required for the
above errors Narratives are NOT required
3. Prepare the Statement of Adjusted Net Income
4. Identify and briefly explain the errors incurred at (c.), (e), and (g) above
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