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1. In the answer of question 18.10 in BPP, it says that “A would give a debit balance of $130”. But why would sales ledger affect trial balance? I thought it should have no influence on control account
2. Question 19.1
I’m also not sure about the double entry of (b) in task 2. If we make a full double entry and disregard suspense account, is it should be:
Dr. Cash 600,000
Dr. SOPL 100,000
Cr. Disposal 700,000
3. In task 2 of question 19.3, why is the carrying amount of buildings not the revalued amount — $1800,000?
Thank u so much sir!
1. Not all companies use control accounts, and if they do not then each balance from the sales ledger appears in the trial balance.
I know we do not know whether or not that is the case, but if they do use control accounts then A would still be wrong.
2. No. They need to correct the depreciation. Then it needs the entries to transfer the cost and the accumulated depreciation to the disposal account. Then we debit cash and credit disposal account. Then we transfer the balance on the disposal account to the SOPL.
I go through all the entries in my free lectures.
3. The answer is wrong. It should be the revalued amount.
Hi sir, I got it, thank you! 🙂
But in task 3 of 19.1, why is SOPL not included in double entry?
Because questions do not normally expect the entries for closing off the accounts (which is what the transfer to the SOPL is).
Oh I see… Thank u so much sir!!
You are welcome 🙂