At the year-end of Muscat Computer Supplies LLC, an imbalance in the list of account balances was revealed which resulted in the creation of a suspense account with a debit balance of RO 92,000. Investigations revealed the following errors. i) Total of purchase book undercast by RO 90,000 ii) Sales day book has been undercast by RO 100,000 iii) RO 25,000 paid towards salary has been credit in cash book correctly, but it has not been posted in the Salary account iv) Electricity charges of RO 1500 paid has been debited to Plant and Machinery account but posted correctly in cash account v) Purchase of goods RO 10,000 for cash had been recorded in the Purchase account as RO 13,000 and correctly recorded in the cash account vi) Credit sale RO 180,000 made to Nizwa Electronics LLC (Accounts receivable) has been correctly recorded in the Sales account, but posted as RO 100,000 in Nizwa Electronics LLC account. vii) Sold building for cash RO 45,000 has been recorded in the sales account RO 45,000 and posted correctly in cash account. viii) RO 25,000 paid cash to Ameera has been debited to Sameera. Required: a) Prepare journal entries to correct each of the above errors. Narratives are not required. b) Open a suspense account and show the corrections to be made.
At the year-end of Muscat Computer Supplies LLC, an imbalance in the list of account balances was revealed which resulted in the creation of a suspense account with a debit balance of RO 92,000. Investigations revealed the following errors. i) Total of purchase book undercast by RO 90,000 ii) Sales day book has been undercast by RO 100,000 iii) RO 25,000 paid towards salary has been credit in cash book correctly, but it has not been posted in the Salary account iv) Electricity charges of RO 1500 paid has been debited to Plant and Machinery account but posted correctly in cash account v) Purchase of goods RO 10,000 for cash had been recorded in the Purchase account as RO 13,000 and correctly recorded in the cash account vi) Credit sale RO 180,000 made to Nizwa Electronics LLC (Accounts receivable) has been correctly recorded in the Sales account, but posted as RO 100,000 in Nizwa Electronics LLC account. vii) Sold building for cash RO 45,000 has been recorded in the sales account RO 45,000 and posted correctly in cash account. viii) RO 25,000 paid cash to Ameera has been debited to Sameera. Required: a) Prepare journal entries to correct each of the above errors. Narratives are not required. b) Open a suspense account and show the corrections to be made.
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter5: Accounting Systems
Section: Chapter Questions
Problem 19E: After Bunker Hill Assay Services Inc. had completed all postings for March in the current year...
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Transcribed Image Text:At the year-end of Muscat Computer Supplies LLC, an imbalance in the list of account balances
was revealed which resulted in the creation of a suspense account with a debit balance of RO
92,000.
Investigations revealed the following errors.
i) Total of purchase book undercast by RO 90,000
ii) Sales day book has been undercast by RO 100,000
iii) RO 25,000 paid towards salary has been credit in cash book correctly, but it has not been posted
in the Salary account
iv) Electricity charges of RO 1500 paid has been debited to Plant and Machinery account but
posted correctly in cash account
v) Purchase of goods RO 10,000 for cash had been recorded in the Purchase account as RO 13,000
and correctly recorded in the cash account
vi) Credit sale RO 180,000 made to Nizwa Electronics LLC (Accounts receivable) has been
correctly recorded in the Sales account, but posted as RO 100,000 in Nizwa Electronics LLC
account.
vii) Sold building for cash RO 45,000 has been recorded in the sales account RO 45,000 and posted
correctly in cash account.
viii)
RO 25,000 paid cash to Ameera has been debited to Sameera.
Required:
a) Prepare journal entries to correct each of the above errors. Narratives are not required.
b) Open a suspense account and show the corrections to be made.
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