The following errors were discovered during the financial year ended 28 February 2021. a) A debtor that was owing N$ 600 was erroneously written-off as bad debt; b) Cash receipt of $300 was recorded as bank receipt; c) A payment of N$ 1 500 received from a customer was recorded on supplier; d) Credit sales of N$ 4 300 was recorded to supplier account; Page 18 of 19 e) Bank charge of $420 was completely omitted from the records; f) Stationery purchased of $ 580 was debited to advertisement; g) Printing that was purchased by EFT was completely ignored in the books, $630; h) A customer that was owing $1 250 was declared bankrupt and the transaction was not recorded; i) The owner withdraws a cheque for $900 and deposited in the business; j) Depreciation for motor vehicle was not provided for. Depreciation is at 10% straight line and no residual value. k) Depreciation for computer equipment was not provided for. Depreciation as at 15%, straight line with N$ 2 000 residual value. REQUIRED Prepare a corrected Trial Balance as at 28 February 2021, after incorporating the above errors
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
The following errors were discovered during the financial year ended 28 February 2021.
a) A debtor that was owing N$ 600 was erroneously written-off as
b) Cash receipt of $300 was recorded as bank receipt;
c) A payment of N$ 1 500 received from a customer was recorded on supplier;
d) Credit sales of N$ 4 300 was recorded to supplier account;
Page 18 of 19
e) Bank charge of $420 was completely omitted from the records;
f) Stationery purchased of $ 580 was debited to advertisement;
g) Printing that was purchased by EFT was completely ignored in the books, $630;
h) A customer that was owing $1 250 was declared bankrupt and the transaction was not
recorded;
i) The owner withdraws a cheque for $900 and deposited in the business;
j) Depreciation for motor vehicle was not provided for. Depreciation is at 10% straight line
and no residual value.
k) Depreciation for computer equipment was not provided for. Depreciation as at 15%,
straight line with N$ 2 000 residual value.
REQUIRED
Prepare a corrected
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