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Chapter 15 Suspense accounts

Q1 Bastien

Journal
Dr Cr
$ $
(1) Veeraj 70
Suspense 70
Correction of discount received from Veeraj omitted from his account in error.

(2) Bernard 50
Suspense 50
Correction of sale of goods for $1050 to Bernard debited to his account as $1000.

(3) Suspense 800


Rodney 800
Cheque for $400 received from Rodney was debited to his account in error, now
corrected.

(4) Motor vehicles 12 000


Purchases 12 000
Correction of incorrect posting to Purchases account of a motor vehicle purchased from
Nedof Motors for $12 000.

(5) Bastien Drawings 60


Sundry expenses 60
Correction of incorrect posting to Sundry expenses of Bastiens personal expenses.

Q2 Boulder

(a) Journal

$ $

(1) Suspense 644

Head (Sales ledger account) 644


Cash received from Head, $313, was debited to his account as $331.

(2) Suspense 100


Joey (Sales ledger) 100
Goods returned by Joey omitted from his account.

(3) Motor Vehicles 3 000


Motor vehicle expenses 3 000
Purchase of Motor truck debited to Motor Expenses in error.

(4) Suspense 300


Discounts Allowed 300
Discount column in cash book overcast by $300.
(5) Profit and Loss Account
(Loss of cash by theft) 700
Cash (or Bank) 700
Cash stolen by employee and not recoverable.

(b) Suspense account

2004 $ 2004 $
Mar 31 Head (sales ledger) 644 Mar 31 Difference on trial balance 1044
Joey (sales ledger) 100
Discounts Allowed 300
1044 1044

(c) Revised working capital $


Working capital before amendment 2400
Deduct Reductions in sales ledger balances:
Head ( 644)
Joey (100)
Reduction of cash because of theft (700)
Revised net working capital 956

Q3 Amber

(a) Journal
Dr Cr
$ $
(1) Victor 90
Purchases Returns 90
Bank (or Cash) 90
Victor purchase ledger 90
(2) Shah (purchases ledger) 420
General Expenses 240
Suspense 180
(3) Sales Returns 900
Purchases 900
(4) Hussein (purchases ledger) 350
Purchases Returns 350
(5) Suspense 600
Discounts Received 600

(b) Suspense account

2003 $ 2003 $
Dec 31 Discounts Received 600 Dec 31 Difference on trial balance 420
Shah (purchases ledger) 180
600 600

(c) A difference on a trial balance may be written off to Profit and Loss Account if the amount is not
considered material. The cost in time and labour in trying to find the cause of the difference may
exceed the sum involved. A small difference may conceal one or more errors of significant
amounts. If there is any reason to believe that other major errors may be involved, the amount
should not be written off, but further efforts should be made to find the error(s).
Q4 Logan
(a) Journal
$ $

(1) Discounts received 55


Discounts allowed 55
Suspense 110
(2) Suspense 216
Sales returns 108
Purchases returns 108
(3) Debtors Control 400
Bank 400
(4) Equipment 4 400
Purchases 4 400
(5) Drawings 800
Purchases 800
(6) Drawings 90
Suspense 90
General Expenses 180

(b) Suspense account

$ $
Sales Returns 108 Diff. on TB 196
Purchases Returns 108 Discount Recd 55
General expenses 90 Discount Alld 55
306 306

(c) Revised trial balance at 31 March 2004


$ $
Sales 131 940
Purchases 27 800
Sales Returns 152
Purchases Returns 423
Opening stock 6 900
Debtors 14 525
Creditors 16 070
Discount Allowed 755
Discount Received 559
Wages and Salaries 20 600
Advertising 1 000
General Expenses 2 250
Bank 13 310
Premises 70 000
Motor Vehicles 5 000
Equipment 7 900
Capital 25 000
Drawings 3 890
173 992 173 992
(d) Revised net profit
Decrease Increase
$ $ $
Per draft accounts 25 000
Discounts received 55
Discounts allowed 55
Sales returns 108
Purchases returns 108
Purchases 4400
Purchases 800
General expenses 180
110 5596
110 5 486
Revised net profit 30 486