The trial balance of Antioch Bhd. revealed a debit total of RM130,000 and a credit total of RM135,432 as at 30 June 2019. The draft net profit was RM50,000. After further investigation, the following errors were discovered: (i) The purchases journal was overcast by RM950. (ii) Payment by cheque of RM550 for utility was recorded only in the cash book. (iii) Cash payment of RM513 for stationery had been debited as RM531 in the stationery account. (iv) The debit side of the cash book has been undercast by RM20,000. (v) Last year’s allowance for doubtful debts was RM9,100. This year’s allowance for doubtful debts was decided to be RM10,000. The allowance account was debited in error. (vi) The bank statement shows a loan interest of RM330, but this has not been recorded in the accounts. (vii) Depreciation was calculated at RM500 but recorded as RM50. This was correctly recorded in the Accumulated Depreciation account. (viii) Discounts received of RM4,200 has been credited to the Trade Payables Control Account. (ix) Carriage inwards of RM2,200 has been entered as a credit in the carriage inwards account. Required: (a) Prepare the journal entries to correct the above errors. Narratives are NOT required. (b) Prepare suspense account. (c) Prepare statement of corrected net profit.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 4PB: Bristax Corporation recorded $1,385,660 in credit sales for the year, and $732,410 in accounts...

See similar textbooks

Related questions

Question

The trial balance of Antioch Bhd. revealed a debit total of RM130,000 and a credit total of RM135,432 as at 30 June 2019. The draft net profit was RM50,000. After further investigation, the following errors were discovered:
(i) The purchases journal was overcast by RM950.
(ii) Payment by cheque of RM550 for utility was recorded only in the cash book.
(iii) Cash payment of RM513 for stationery had been debited as RM531 in the stationery account.
(iv) The debit side of the cash book has been undercast by RM20,000.
(v) Last year’s allowance for doubtful debts was RM9,100. This year’s allowance for doubtful debts was decided to be RM10,000. The allowance account was debited in error.
(vi) The bank statement shows a loan interest of RM330, but this has not been recorded in the accounts.
(vii) Depreciation was calculated at RM500 but recorded as RM50. This was correctly recorded in the Accumulated Depreciation account.
(viii) Discounts received of RM4,200 has been credited to the Trade Payables Control Account.
(ix) Carriage inwards of RM2,200 has been entered as a credit in the carriage inwards account.
Required:
(a) Prepare the journal entries to correct the above errors. Narratives are NOT required.
(b) Prepare suspense account.
(c) Prepare statement of corrected net profit.

Expert Solution

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here