Part B: The balances extracted from the records of Sky at 31 August 2018 were as follows:
Premises
7,500
Capital
8,750
Drawings
1,200
Accumulated depreciation of office equipment at 1 September 2017
400
Receivables control account
1,873
Payables control account
2,030
Inventory at 1 September 2017
1,200
Purchases
9,540
Sales
14,945
Return inwards
250
Office equipment (cost) (balance at 1 September 2017)
1,500
Wages Expense
1,300
Commission Expense
200
Discount allowed
230
Discount received
100
Cash at bank
750
Cash in hand
208
Heating and lighting expense
368
Postage and stationary expense
250
Bad debts expense
108
A preliminary trial balance was prepared, but, although no arithmetical errors were made, the trial balance did not balance. In seeking the reasons for the difference, the following facts emerged.
1. Receivables control account
a. No entry had been made in the control account in respect of the debts written off as bad.
b. A cheque paid by a debtor for £235 had been returned on 31 August 2018 by the bank as dishonoured check. An entry had been made in both bank account and the debtor’s account for this, but no entry had been made in the control account.
c. Sales on credit of £189 to Jack had been correctly entered in his account but nothing had been entered in the control account.
d. Marry had been allowed a cash discount of £195, but no corresponding entry had appeared in the control account.
e. Cash receipts £200 from receivables treated as a cash sale
2. Payables control account
The difference between balance of payable control account and total balance of payable ledgers was caused by:
a. Goods returned to Harper costing £105 had been entered correctly in the control account, but no entry had been made in Harper’s account.
b. A purchase invoice for £625 had been incorrectly entered in the control account as £652, but correctly in the purchase account.
c. Two credit balances of £58 and £68 had been omitted from the list extracted from the payables ledgers.
d. A payables ledger contra of £175 has been entered in Cloud's account in the receivables ledger but no other entry had been made
e. Discount received £200 had been debited to the discount allowed account
f. The purchase day book had been undercast by £1,460
3. Some office equipment which had cost £280 had been debited to the purchase account(depreciation for this equipment is charged full year).
4. The wages expense included £450 of personal drawings by the owner of the business.
5. The depreciation for equipment should have been charged at 15% on cost, but no entries for depreciation for the period
6. The account for stationary included £70 of personal notepaper for the owner.
You are required to:
i. What are purposes of using control account and suspense account? Explain the process taken to reconcile control accounts and clear suspense accounts as well as how and why they are reconciled, using the given account example.
ii. Prepare the receivables and payables control accounts, taking into account where appropriate the facts ascertained in notes above;
iii. Prepare necessary journal entries to correct the errors above ;
iiii. Given that Sky’s inventory at 31 August 2018was valued at £989, prepare an Income Statement for the year ended 31 August 2018 and a Balance Sheet as at 31 August 2018
Tình hình là em có bài như này ạ, nhưng mà phần control account ở mục ii thì ko hiểu phải làm thế nào vì có tài liệu thì có suspense nhưng có cái thì lại ko có suspense, em muốn hỏi mọi người là cái control đó làm như nào ạ?
Premises
7,500
Capital
8,750
Drawings
1,200
Accumulated depreciation of office equipment at 1 September 2017
400
Receivables control account
1,873
Payables control account
2,030
Inventory at 1 September 2017
1,200
Purchases
9,540
Sales
14,945
Return inwards
250
Office equipment (cost) (balance at 1 September 2017)
1,500
Wages Expense
1,300
Commission Expense
200
Discount allowed
230
Discount received
100
Cash at bank
750
Cash in hand
208
Heating and lighting expense
368
Postage and stationary expense
250
Bad debts expense
108
A preliminary trial balance was prepared, but, although no arithmetical errors were made, the trial balance did not balance. In seeking the reasons for the difference, the following facts emerged.
1. Receivables control account
a. No entry had been made in the control account in respect of the debts written off as bad.
b. A cheque paid by a debtor for £235 had been returned on 31 August 2018 by the bank as dishonoured check. An entry had been made in both bank account and the debtor’s account for this, but no entry had been made in the control account.
c. Sales on credit of £189 to Jack had been correctly entered in his account but nothing had been entered in the control account.
d. Marry had been allowed a cash discount of £195, but no corresponding entry had appeared in the control account.
e. Cash receipts £200 from receivables treated as a cash sale
2. Payables control account
The difference between balance of payable control account and total balance of payable ledgers was caused by:
a. Goods returned to Harper costing £105 had been entered correctly in the control account, but no entry had been made in Harper’s account.
b. A purchase invoice for £625 had been incorrectly entered in the control account as £652, but correctly in the purchase account.
c. Two credit balances of £58 and £68 had been omitted from the list extracted from the payables ledgers.
d. A payables ledger contra of £175 has been entered in Cloud's account in the receivables ledger but no other entry had been made
e. Discount received £200 had been debited to the discount allowed account
f. The purchase day book had been undercast by £1,460
3. Some office equipment which had cost £280 had been debited to the purchase account(depreciation for this equipment is charged full year).
4. The wages expense included £450 of personal drawings by the owner of the business.
5. The depreciation for equipment should have been charged at 15% on cost, but no entries for depreciation for the period
6. The account for stationary included £70 of personal notepaper for the owner.
You are required to:
i. What are purposes of using control account and suspense account? Explain the process taken to reconcile control accounts and clear suspense accounts as well as how and why they are reconciled, using the given account example.
ii. Prepare the receivables and payables control accounts, taking into account where appropriate the facts ascertained in notes above;
iii. Prepare necessary journal entries to correct the errors above ;
iiii. Given that Sky’s inventory at 31 August 2018was valued at £989, prepare an Income Statement for the year ended 31 August 2018 and a Balance Sheet as at 31 August 2018
Tình hình là em có bài như này ạ, nhưng mà phần control account ở mục ii thì ko hiểu phải làm thế nào vì có tài liệu thì có suspense nhưng có cái thì lại ko có suspense, em muốn hỏi mọi người là cái control đó làm như nào ạ?
