1
You have extracted a trial balance and drawn up accounts for the year ended
31 December 2007. There was a shortage of £78 on the credit side of the trial balance, a suspense
account being opened for that amount.
During 2008 the following errors made in 2007 were found:
(i) £125 received from sales of old office equipment has been entered in the sales account.
(ii) Purchases day book had been overcast by £10.
iii
) A private purchase of £140 had been included in the business purchases.
(iv) Bank charges £22 entered in the cash book have not been posted to the bank charges account.
(v) A sale of goods to K Lamb £230 was correctly entered in the sales book but entered in the personal
account as £320.
Required:
(a) Show the requisite journal entries to correct the errors.
(b) Write up the suspense account showing the correction of the errors.
(c) The net profit originally calculated for 2007 was £28,400. Show your calculation of the correct.