Page 239 - ISCDEBK-XI

Rectification of Errors 21.27
Working Notes:
1. Cash Balance as on 31st March, 2022 `
Balance as per the Trial Balance 90,000
Less: Suspense (` 90,000 – ` 9,000) 81,000
9,000
Add: Cash Sales 45,000
54,000
2. Difference in Depreciation Charges
Car as per Trial Balance 42,500
Value of car before depreciation @ 15% (` 42,500 × 100/85) 50,000
Deprecaition at 20% on ` 50,000 10,000
Less: Depreciation at 15% on ` 50,000 7,500
Additional depreciation to be charged 2,500
3. Capital Account
Balance as per Trial Balance 56,150
Less: Electricity Bill 18,000
Credit Card Expenses 15,000 33,000
23,150
Illustration 19.
A bookkeeper while preparing his Trial Balance finds that the debit exceeds by ` 7,250. For
preparing the Final Accounts he places the difference in Suspense Account. In the next year,
the following errors were discovered:
(i) A sale of ` 4,000 has been passed through the Purchases Book. The entry in Customer’s
Account has been correctly recorded.
(ii) Goods worth ` 2,500 taken by the proprietor for his use have been debited to
Repairs Account.
(iii) A Bill Receivable for ` 1,300 received from Krishna has been dishonoured on maturity
but no entry was passed.
(iv) Salary ` 650 paid to Manhad has been debited to his Personal Account.
(v) A purchase of ` 750 from Raghubir has been debited to his account. Purchases Account
has been correctly debited.
(vi) A sum of ` 2,250 written off as depreciation on furniture has not been debited to
Depreciation Account.
Pass Journal entries for rectifying the above errors and prepare the Suspense Account.
Solution: RECTIFYING JOURNAL ENTRIES

Date Particulars L.F. Dr. (`) Cr. (`)
(i) Suspense A/c ...Dr. 8,000
To Profit & Loss Adjustment A/c 8,000
(Being the rectification of a credit sale wrongly passed
through the Purchases Book)
(ii) Drawings A/c ...Dr. 2,500
To Profit & Loss Adjustments A/c 2,500
(Being the goods withdrawn for personal use wrongly debited to
Repairs Account, now rectified)
(iii) Krishna ...Dr. 1,300
To Bills Receivable A/c 1,300
(Being the entry for bill drawn on Krishna dishonoured on maturity)