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Sir I don’t understand this
Interest received of $70 had been entered in the bank account only.
So my answer is
Dr cash account 70
Cr Suspence 70I’m a bit not good in reading so pls sir help me out
Bank account and cash account are the same thing.
They should have debited cash and credited interest.
Since the have only entered it in the cash account and not in the interest account, the correction is to credit interest and debit suspense account.Included in the suspense account are the following receipts and payments. These
have been correctly recorded in the bank account:
Proceeds of selling land and buildings which had an original cost of
$1,200,000 and a net book value of $800,000. Proceeds of $2,100,000 have
been credited to suspense and no other entries have been made.And what are you asking? Someone to do the question for you? 🙂
You need to debit the suspense account and credit the disposal account with 2.1M (because that is where it should have been credited), and then put through the normal entries for the disposal and calculate the profit or loss on sale for the SOPL.
The free lectures on depreciation will help you – they deal with the disposal of non-current assets.
(Our free lectures are a complete course for Paper F3 and cover everything needed to be able to pass the exam well.)
Sir the proceeds involves cash right? So how come it won’t be recorded in the cash account?
The question actually says that they have been correctly recorded in the bank account (which is the same as the cash account)!
The question actually says that they have been correctly recorded in the bank account (which is the same as the cash account)!
No I don’t want you to solve question for me
I was confused bcz of wording of question
I want To know why don’t cost and NBV are subtracted from suspense accountA suspense account is only needed if the trial balance does not balance (because the debits do not equal the credits).
Since no other entries have been made (so no entries at all to remove the cost or the accumulated depreciation) there have been no debits or credits for these and therefore the balancing of the trial balance is not affected by them and they do not therefore effect the suspense account.
I do suggest that you watch our free lectures on suspense accounts. (Our free lectures are a complete course for Paper F3 and cover everything needed to be able to pass the exam well.)
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