At the end of year there was an imbalance in the trial balance of Messy and Co which meant that asuspense account with a credit balance of €700 had to be created.The following items were discovered after investigation:I.A sales credit note for €750 was correctly recorded on the trade receivables account butinconectly included with purchases returns.A stock of Heating Oil valued at €300 had not been accounted for at all. All costs associatedwith light and heat have been recorded in the appropriate expense account.III.П.An early settlement discount of €100 had been taken even though the early payment period hadexpired, and the supplier statement records the amount as still dueCost of sales included €750 for components for a new non-current asset. These componentswill extend the useful life of the asset and should have been capitalised.Sale of goods for €1,200 on credit had been entered correctly in the trade receivables accountbut omitted in the sales account.IV.V.VI. Trade purchases amounting to €650 had been correctly reflected in the trade payables accountbut entered as €1,650 in the purchases accountBefore the above, Messy and Co had recorded a gross profit of €46,000 and a Net profit of €28,750.Required:1. Prepare the Joumal Entries needed to correct each of the errors. (namatives ot required)2. Prepare the Suspense account to reflect the above transactions3. Calculate the revised Gross and Net prdfit after the adjustments have been made

Suspense Account is the temporary account created to correct errors and omissions.

At the end of year there was an imbalance in suspense account with a credit balance of €7C The following items were discovered after im I. A sales credit note for €750 was corre incomectly included with purchases rE П. II. with light and heat have been recorde Anearly settlement discount of €100 expired, and the supplier statement re IV. A stock of Heating Oil valued at €300 II. Cost of sales included €750 for comp

At the end of year there was an imbalance in suspense account with a credit balance of €7C The following items were discovered after im I. A sales credit note for €750 was corre incomectly included with purchases rE П. II. with light and heat have been recorde Anearly settlement discount of €100 expired, and the supplier statement re IV. A stock of Heating Oil valued at €300 II. Cost of sales included €750 for comp

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter9: Receivables

Section: Chapter Questions

Problem 9E: Waddell Industries has a past history of uncollectible accounts, as follows. Estimate the allowance...

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Blackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $22,350. The account had an unadjusted credit balance of $11,300 at that time. a. The appropriate bad debt adjustment was recorded. b. Later, an account receivable for $2,300 was determined to be uncollectible and was written off. Required: For each transaction listed above, indicate the amount and direction (+ for increase or - for decrease) of effects on the financial statement accounts and on the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign.) Assets Allowance for Doubtful Accounts Allowance for Doubtful Accounts a. b. b. Accounts Receivable 9,250 X = 1,100 X = (1,100) X = > Answer is complete but not entirely correct. Liabilities + + + + Bad Debt Expense Stockholders' Equity 9,250 X
Blackhorse Productions, Inc., used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $23,550. The account had an unadjusted credit balance of $11,900 at that time. a. The appropriate bad debt adjustment was recorded. b. Later, an account receivable for $2,900 was determined to be uncollectible and was written off. Required: For each transaction listed above, indicate the amount and direction +for increase or -for decrease) of effects on the financial statement accounts and on the overall accounting equation. (Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign.) Assets Liabilities Stockholders' Equity
The trial balance of The White Ribbon failed to agree, and the difference was posted to a suspense account. The Income Statement then showed a net loss $15,800. A subsequent audit revealed the following accounting errors a) The loan interest of $25,000 was paid by cheque and correctly posted in the cashbook, but was debited to the loan account b) An invoice for credit sales of $70,000 was posted in the sales ledger but was not posted in the sales account c) Office expense of $30,000 paid by cheque and correctly posted in the cashbook, was debited to the Insurance account d) The Closing Stock valued at $60,500 was taken as $44,500 e) Cash donations of $22,500 was posted to the books as $55,200 f) The Opening Stock valued at $35,000 was taken as $55,000 g) Building repairs paid for $40,000 by cheque was correctly recorded in the cashbook but was debited to the building account Required REQUIRED 2. Prepare the Statement of Adjusted Net Income and identify and briefly explain the errors…
The trial balance of The White Ribbon failed to agree, and the difference was posted to a suspense account. The Income Statement then showed a net loss $15,800. A subsequent audit revealed the following accounting errorsa) The loan interest of $25,000 was paid by cheque and correctly posted in the cashbook, but was debited to the loan accountb) An invoice for credit sales of $70,000 was posted in the sales ledger but was not posted in the sales accountc) Office expense of $30,000 paid by cheque and correctly posted in the cashbook, was debited to the Insurance accountd) The Closing Stock valued at $60,500 was taken as $44,500e) Cash donations of $22,500 was posted to the books as $55,200f) The Opening Stock valued at $35,000 was taken as $55,000g) Building repairs paid for $40,000 by cheque was correctly recorded in the cashbook but was debited to the building accountRequired1. Write up the General Journal to note the corrections required for the above…
Blackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $19,250. The account had an unadjusted credit balance of $12,000 at that time. Required: Prepare journal entries for each of the following. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) a. The appropriate bad debt adjustment was recorded. b. Later, an account receivable for $1,200 was determined to be uncollectible and was written off. View transaction list Journal entry worksheet く 1 2 Record the end-of-period adjustment for bad debts under the aging of accounts receivable method. Note: Enter debits before credits. Transaction General Journal Debit Credit
The balance of Artemis' sales ledger control account on 31 July 2023 was $39 130. On that same date, the list of balances contained in the sales ledger amounted to $36 750. After investigation the following errors were found. 1. A credit sale of $3 050 had been made to Gilles but no entries had been made to record this transaction. 2. The discount allowed total in the cash book had been undercast by $370. 3. A sales return of $600 from Betty was correctly recorded in the sales ledger but had been omitted from the total of the return inwards journal. 4. A cheque received in June from Francis for $1 840 had been dishonoured. No entries have been made to record this dishonoured cheque. 5. A credit sale of $1500 to Harry was correctly recorded in the sales journal but no entry had been made in the sales ledger. 6. The sales recorded in the control account had been overcast by $250. 7. A receipt from a credit customer of $340 had been omitted from the list of balances. REQUIRED: a) Prepare…
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…
The trial balance of ASEM MPE NIPA Ltd. for the year ended 31st December 2015 failed to agree and the difference of GH¢81,000 was debited to the suspense account. Accounts were prepared on the basis of the trial balance and showed a net profit of GH¢2,000,000.The following errors were subsequently discovered:a. The sales daybook had been overcast by GH¢9,000b. The discount allowed of GH¢61,200 correctly entered in the sales ledger had been postedto the wrong side of the discount allowed account in the nominal ledgerc. Cheques received from Ibrahim a customer amounting to GH¢18,200 was entered correctly in the cash book but has been credited to the personal account as GH¢12,800d. A credit purchase of GH¢27,000 from Ruth has not been entered on her personal account in the bought ledger.e. A credit note of GH¢12,600 for goods returned by Korkor a customer had been entered twice in the return inward book and credited twice to the personal account of the customerf. A payment of GH¢39,000 on…
Blackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Allowance for Doubtful Accounts should be $19,350. The account had an unadjusted credit balance of $10,000 at that time. Required: Prepare journal entries for each of the following. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) a. The appropriate bad debt adjustment was recorded b. Later, an account receivable for $1000 was determined to be uncollectible and was written off. View transaction but Journal entry worksheet Record the end-of-period adjustment for bad debts under the aging of accounts receivable method. Note: Enter dets before creats. Transaction General Journal Debit Credit Cleary Resend untry
Waddell Industries has a past history of uncollectible accounts, as follows. Estimate the allowance for doubtful accounts, based on the aging of receivables schedule you completed in Exercise 9-8. The accounts receivable clerk for Waddell Industries prepared the following partially completed aging of receivables schedule as of the end of business on August 31: The following accounts were unintentionally omitted from the aging schedule and not included in the preceding subtotals: a. Determine the number of days past due for each of the preceding accounts as of August 31. b. Complete the aging of receivables schedule by adding the omitted accounts to the bottom of the schedule and updating the totals.
After Bunker Hill Assay Services Inc. had completed all postings for March in the current year (20Y4), the sum of the balances in the following accounts payable ledger did not agree with the 36,600 balance of the controlling account in the general ledger: Assuming that the controlling account balance of 36,600 has been verified as correct, (a) determine the error(s) in the preceding accounts and (b) prepare a listing of accounts payable creditor balances (from the corrected accounts payable subsidiary ledger).
Blackhorse Productions, Incorporated, used the aging of accounts receivable method to estimate that its Accounts should be $19,950. The account had an unadjusted credit balance of $11,000 at that time. Required: Prepare journal entries for each of the following. (If no entry is required for a transaction/event, select in the first account field.) a. The appropriate bad debt adjustment was recorded. b. Later, an account receivable for $1,100 was determined to be uncollectible and was written off. View transaction list Journal entry worksheet 1 2 Record the end-of-period adjustment for bad debts under the aging of accounts receivable method. Note: Enter debits before credits. Transaction General Journal Debit Credit View general journal Record entry Clear entry