Hi there, I am confused with this question and would be very grateful for help.
Question: On further investigation of the suspense account it was discovered that a cash receipt of £18,000 had been posted to the suspense account. This represents the proceeds from the disposal of a piece of equipment that had been bought exactly two and a half years ago at a cost of £22,000. The equipment was sold on the last day of the financial year.
I am trying to prepare a income statement (statement of profit and loss). Looking at the information i have on the Trial balance it is showing suspense account (under credits) £18,000. How do i work out what goes on the statement of profit and loss and what goes on the balance sheet? Hope this makes sense.
Many thanks in advance
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Suspense account question can anyone help please?
8y ago#1The 18,000 is the proceeds of sale of equipment, but they have not recorded the sale properly.
So you need to make the normal entries for the sale of a non-current asset, and then transfer the balance on the suspense account to the disposal account (Dr suspense, Cr disposal), where it should have been entered in the first place :-)
(If you have forgotten the entries for the disposal of non-current assets, then do watch my free lectures on it.)
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