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Question -

Trial balance of John did not agree. He put the difference to suspense account and discovered the following errors:
(a) In the sales book for the month of January total of page 2 was carried forward to page 3 as Rs 1,000 instead of Rs 1,200 and total of page 6 was carried forward to page 7 as Rs 5,600 instead of Rs 5,000.
(b) Wages paid for installation of machinery Rs 500 was posted to wages account as Rs 50.
(c) Machinery purchased from R & Co. for Rs 10,000 on credit was entered in Purchase Book as Rs 6,000 and posted there from to R & Co. as Rs 1,000.
(d) Credit sales to Mohan Rs 5,000 were recorded in Purchases Book.
(e) Goods returned to Ram Rs 1,000 were recorded in Sales Book.
(f) Credit purchases from S & Co. for Rs 6,000 were recorded in sales book. However, S & Co. was correctly credited.
(g) Credit purchases from M & Co. Rs 6,000 were recorded in Sales Book as Rs 2,000 and posted there from to the credit of M & Co. as Rs 1,000.
(h) Credit sales to Raman Rs 4,000 posted to the credit of Raghvan as Rs 1,000.
(i) Bill receivable for Rs 1,600 from Noor was dishonoured and posted to debit of Allowances account.
(j) Cash paid to Mani Rs 5,000 against our acceptance was debited to Manu.
(k) Old furniture sold for Rs 3,000 was posted to Sales account as Rs 1,000.
(l) Depreciation provided on furniture Rs 800 was not posted.
(m) Material Rs 10,000 and wages Rs 3,000 were used for construction of building. No adjustment was made in the books.
Rectify the errors and prepare suspense to ascertain the difference in trial balance.



Answer -

Journal Recordings to rectify the errors

 

Date

Particulars

L.F

Debit
Amount
₹

Credit
Amount
₹

a.

Sales A/c Dr.

400

To Suspense A/c

(Sales account overcasted, Error rectification recording, was wrongly carried forward in two pages)

400

b.

Machinery A/c Dr.

500

To Wages A/c

50

To Suspense A/c

(Wages paid for installation of machinery, Error rectification recording, was wrongly posted to the wages account)

450

c.

Machinery A/c Dr.

10,000

Suspense A/c Dr.

5,000

To Purchases A/c

6,000

To R & Co. A/c

(Machinery purchased from R & Co. on credit, Error rectification recording, was wrongly entered in purchases book as ₹ 6,00 and posted into R & Co. as ₹ 1,000)

9,000

d.

Mohan’s A/c Dr.

10,000

To Sales A/c

5,000

To Purchases A/c

(Credit sales to Mohan, Error rectification recording, was wrongly recorded in the purchases book)

5,000

e.

Sales A/c Dr.

1,000

To Purchases Return A/c

(Goods returned to Ram, Error rectification recording, was wrongly recorded in the sales book)

1,000

f.

Purchases A/c Dr.

6,000

Sales A/c Dr.

6,000

To Suspense Return A/c

(Credit purchases from S & Co., Error rectification recording, was wrongly credited in the sales book)

12,000

g.

Purchases A/c Dr.

6,000

Sales A/c Dr.

2,000

To M & Co. A/c

5,000

To Suspense A/c

(Credit purchases from M & Co., Error rectification recording, was wrongly credited in the sales book as ₹ 2,000 and also wrongly credited to the M & Co. account as ₹ 1,000)

3,000

h.

Raman’s A/c Dr.

4,000

Raghavan’s A/c Dr.

1,000

To Suspense Return A/c

(Credit Sales to Raman for ₹ 4,000, Error rectification recording, was wrongly credited to Raghavan’s account with ₹ 1,000)

5,000

i.

Noor’s A/c Dr.

1,600

To Allowance A/c

(Bills receivable for ₹ 1,600 from Noor is dishonoured, Error rectification recording, was wrongly posted to the debit of allowance account)

1,600

j.

Bills Payable A/c Dr.

5,000

To Manu’s A/c

(Cash paid to Mani against our acceptance, Error rectification recording, was wrongly debited to Manu’s account)

5,000

k.

Sales A/c Dr.

1,000

Suspense A/c Dr.

2,000

To Furniture A/c

(Old furniture sold for ₹ 3,000, Error rectification recording, was wrongly posted to sales account as ₹ 1,000)

3,000

l.

Depreciation A/c Dr.

800

To Furniture A/c

(Depreciation provided on furniture, Error rectification recording, was not posted earlier)

800

m.

Building A/c Dr.

13,000

To Purchases A/c

10,000

To Wages A/c

(Material and wages used for the construction of the building, Error rectification recording, was not posted earlier)

3,000

 

Suspense Account

Dr.

Cr.

Date

Particulars

J.F.

Amount
₹

Date

Particulars

J.F.

Amount
₹

To Purchases A/c

5,000

By Sales A/c

400

To Furniture A/c

2,000

By Machinery A/c

450

To Balance c/d

13,850

By Purchases A/c

6,000

By Sales A/c

6,000

By Purchases A/c

3,000

By Raman’s A/c

4,000

By Raghavan’s A/c

1,000

Total

20,850

Total

20,850

Hence, the differencein trial balance is ₹13, 850 excess credit.

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