When the trial balance of GROUP Z Course Rep was extracted on 10/03/2021, a difference of GH¢1,485 (Cr) was disclosed. He also arrived at a net profit of GH¢ 10,611 Upon scrutiny of the records, the following discrepancies emerged: 1. Motor Vehicle costing GH¢22,500 purchased by cash during the year had been credited to Cash Book Account, but debited to Purchases Account as GH¢46,800. 2. Plant Repairs of GH¢ 12,555 had been entered to the credit side of Plant and Equipment Account, 20% depreciation is Charged on plant and equipment. 1 3. 18,000 Interest from loan issued had been credited Cash Book Account and debited to Interest Payable. 4. Yaa Nkotodwe paid the Enterprise an amount of GH¢1,890 in full settlement of debt owed to him. This amount had been charged to debit side of Yaa Nkotodwe's Account, but credited to Cash Book as GH¢1,080. 5. A folio in the cash payments book has been carried forward as GH¢57,375 instead of GH¢60,615 6. The Cash book balance was undercast by GH¢9,540 7. Returns of goods worth GH¢1,935 to a supplier had been posted to the credit side of his account even though it was correctly entered in the returns outwards book 8. The purchases day book has been overcast by GH¢21,780 9. The discount columns in the cash book had been interchanged when posting to the nominal ledger, these are discount allowed GH¢22,680 and discount received GH¢28,530 10. A purchase invoice for GH¢13,500 posted to the purchases ledger, had been credited in the sales day book 11. A sales invoice of GH¢76,500 correctly recorded in the sales ledger had been entered in the sales account as GH¢71,325 Required a. Prepare the Suspense Account b. Draw up the Adjusted Profit for the year
When the trial balance of GROUP Z Course Rep was extracted on 10/03/2021, a difference of GH¢1,485 (Cr) was disclosed. He also arrived at a net profit of GH¢ 10,611 Upon scrutiny of the records, the following discrepancies emerged: 1. Motor Vehicle costing GH¢22,500 purchased by cash during the year had been credited to Cash Book Account, but debited to Purchases Account as GH¢46,800. 2. Plant Repairs of GH¢ 12,555 had been entered to the credit side of Plant and Equipment Account, 20% depreciation is Charged on plant and equipment. 1 3. 18,000 Interest from loan issued had been credited Cash Book Account and debited to Interest Payable. 4. Yaa Nkotodwe paid the Enterprise an amount of GH¢1,890 in full settlement of debt owed to him. This amount had been charged to debit side of Yaa Nkotodwe's Account, but credited to Cash Book as GH¢1,080. 5. A folio in the cash payments book has been carried forward as GH¢57,375 instead of GH¢60,615 6. The Cash book balance was undercast by GH¢9,540 7. Returns of goods worth GH¢1,935 to a supplier had been posted to the credit side of his account even though it was correctly entered in the returns outwards book 8. The purchases day book has been overcast by GH¢21,780 9. The discount columns in the cash book had been interchanged when posting to the nominal ledger, these are discount allowed GH¢22,680 and discount received GH¢28,530 10. A purchase invoice for GH¢13,500 posted to the purchases ledger, had been credited in the sales day book 11. A sales invoice of GH¢76,500 correctly recorded in the sales ledger had been entered in the sales account as GH¢71,325 Required a. Prepare the Suspense Account b. Draw up the Adjusted Profit for the year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation Accounting
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Transcribed Image Text:QUESTION 1
When the trial balance of GROUP Z Course Rep was extracted on 10/03/2021, a difference of
GH¢1,485 (Cr) was disclosed. He also arrived at a net profit of GH¢ 10,611
Upon scrutiny of the records, the following discrepancies emerged:
1. Motor Vehicle costing GH¢22,500 purchased by cash during the year had been credited
to Cash Book Account, but debited to Purchases Account as GH¢46,800.
2. Plant Repairs of GH¢12,555 had been entered to the credit side of Plant and Equipment
Account, 20% depreciation is Charged on plant and equipment.
3. GH¢ 18,000 Interest earned from loan issued had been credited to Cash Book Account
and debited to Interest Payable.
4. Yaa Nkotodwe paid the Enterprise an amount of GH¢1,890 in full settlement of debt
owed to him. This amount had been charged to debit side of Yaa Nkotodwe's Account,
but credited to Cash Book as GH¢1,080.
5. A folio in the cash payments book has been carried forward as GH¢57,375 instead of
GH¢60,615
6. The Cash book balance was undercast by GH¢9,540
7. Returns of goods worth GH¢1,935 to a supplier had been posted to the credit side of
his account even though it was correctly entered in the returns outwards book
8. The purchases day book has been overcast by GH¢21,780
9. The discount columns in the cash book had been interchanged when posting to the
nominal ledger, these are discount allowed GH¢22,680 and discount received
GH¢28,530
10. A purchase invoice for GH¢13,500 posted to the purchases ledger, had been credited in
the sales day book
11. A sales invoice of GH¢76,500 correctly recorded in the sales ledger had been entered
in the sales account as GH¢71,325
Required
a. Prepare the Suspense Account
b. Draw up the Adjusted Profit for the year
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