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 1

S. No.				Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
(a)	Sales A/c				Dr.		400
			To Suspense A/c					400
	(Net balance of Sales Book overcasted by Rs 400, now rectified)
(b)	Machinery A/c				Dr.		500
			To Wages A/c					50
			To Suspense A/c					450
	(Wages paid for installation of machinery wrongly posted as Rs 50 to Wages Account, now rectified)
(c)	Machinery A/c				Dr.		10,000
	Suspense A/c				Dr.		5,000
			To Purchases A/c					6,000
			To R & Co. A/c					9,000
	(Purchased machinery from R & Co. Rs 10,000 wrongly posted to Purchases Book as Rs 6,000 and posted to R & Co. Account Rs 1,000, now rectified)
(d)	Mohan				Dr.		10,000
			To Sales A/c					5,000
			To Purchases A/c					5,000
	(Goods sold to Mohan Rs 5,000 wrongly recorded in the Purchases Book, now rectified)
(e)	Sales A/c				Dr.		1,000
			To Purchases Return A/c					1,000
	(Goods returned to Ram wrongly recorded in the Sales Book, now rectified)
(f)	Purchases A/c				Dr.		6,000
	Sales A/c						6,000
			To Suspense A/c					12,000
	(Purchased goods from S & Co. wrongly recorded in the Sales Book; however, correctly credited to S & Co. Account, now rectified)
(g)	Purchases A/c				Dr.		6,000
	Sales A/c				Dr.		2,000
			To M & Co.					5,000
			To Suspense A/c					3,000
	(Purchased goods from M & Co. Rs 6,000 wrongly recorded in Sales Book as Rs 2,000 and credited to M & Co. Account as Rs 1,000, now rectified)
(h)	Raman				Dr.		4,000
	Raghvan				Dr.		1,000
			To Suspense A/c					5,000
	(Sold goods to Raman Rs 4,000 wrongly posted to the credit of Raghavan's Account as Rs 1,000, now rectified)
(i)	Noor A/c				Dr.		1,600
			To Allowance A/c					1,600
	(B/R dishonoured, which was received from Noor, wrongly debited to Allowance Account instead of Noor, now rectified)
(j)	Bills Payable A/c				Dr.		5,000
		To Manu						5,000
	(Amount of Bill Payable paid to Mani wrongly debited to Manu’s Account, now rectified)
(k)	Sales A/c				Dr.		1,000
	Suspense A/c				Dr.		2,000
			To Furniture A/c					3,000
	(Old furniture sold for Rs 3,000 wrongly posted to Sales Account as Rs 1,000, now rectified)
(l)	Depreciation A/c				Dr.		800
			To Furniture A/c					800
	(Depreciation on furniture was not posted, now rectified)
(m)	Building A/c				Dr.		13,000
			To Purchases A/c					10,000
			To Wages A/c					3,000
	(Material Rs 10,000 and wages Rs 3,000 that were used for construction of building were not recorded, now rectified)

Note: In item (m), it has been assumed that the materials used in the construction of building are part of stock in trade.

Suspense Account
Dr.							Cr.
S. No.	Particulars	J.F.	Amount Rs	S. No.	Particulars	J.F.	Amount Rs
(c)	Purchases		5,000	(a)	Sales		400
(k)	Furniture		2,000	(b)	Machinery		450
				(f)	Purchases		6,000
					Sales		6,000
				(g)	Purchases		3,000
				(h)	Raman		4,000
	Balance c/d		13,850		Raghvan		1,000
			20,850				20,850