Page 129 - debkxi

17.4 Double Entry Book Keeping—CBSE XI

Solution:
RECTIFYING JOURNAL ENTRIES
Date Particulars L.F. Dr. (`) Cr. (`)
(i) Sales Return A/c ...Dr. 5,000
To Customer’s A/c 5,000
(Rectification of goods returned by a customer omitted from books)
(ii) Purchases A/c ...Dr. 15,000
To Mohan & Co. 15,000
(Rectification of purchase of goods from Mohan & Co.
omitted from books)
(iii) Purchases Return A/c ...Dr. 5,000
Sales Return A/c ...Dr. 5,000
To Mohan 10,000
(Rectification of returns from Mohan passed through
Purchases Return Book)

(iv) Sohan ...Dr. 16,000
To Sales Return A/c 8,000
To Purchases Return A/c 8,000
(Rectification of Purchases Return to Sohan passed through
Sales Return Book)

STATEMENT SHOWING EFFECT OF RECTIFICATION OF ERRORS ON NET PROFIT
Effect on Net Profit Dr. (`) Cr. (`)

(i) Reduce Profit by 5,000 ...
(ii) Reduce Profit by 15,000 ...
(iii) Reduce Profit by 10,000 ...
(iv) Increase Profit by ... 16,000
30,000 16,000
Net Decrease in Profit (` 30,000 – ` 16,000) ... 14,000
30,000 30,000

4. Pass rectification entries for the following transactions:
(i) A builder’s bill for ` 20,000 for erection of a small shed was debited to Repairs
Account.
(ii) Repairs to plant amounting to ` 5,000 had been charged to Plant and
Machinery Account.

(iii) Wages paid to the firm’s workmen for making certain additions to machinery
amounting to ` 7,000 were debited to Wages Account.