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1. The Trial Balance at 31 March 2024 prepared for F & R Ltd was balanced by the inclusion of a Suspense Account item. Subsequently, errors were found which, when corrected, will eliminate the Suspense Account. These errors are included in the list below:
a) An item of $207 in the Sales Journal had been posted to the Sales Ledger incorrectly as $277.
b) A new ramp received on 12 March 2024 and used from 20 March 2024 onwards (purchase price $12 000) had not been invoiced; terms of payment were one month after receipt of invoice. The cost had been posted to Equipment Account only.
c) A loan of $3500 to an employee had been treated as part of his salary.
d) An invoice of $190 for telephone charges accrued to 31 March 2023, debited to Administrative Expenses as at that date, had not been credited in year ended 31 March 2024.i) Prepare a Journal to record the correcting entries for the errors above
ii) Prepare the Suspense account (cr bal 12260)I can’t seem to get the credit balance of 12260. Here are my working:
a) Dt Sales | Ct Suspense ($70)
b) Dt Suspense | Ct Other payables ($12,000)
c) Dt Suspense | Ct Salary, Dt Loan receivable | Ct Suspense ($3,500)
d) Dt Suspense | Ct Administrative expense ($190)Suspense accounts arise only from one-sided errors.
(a) 70 too much Dr, so this would need a Cr in the suspense account to make it balance.
(b) 12000 to much Dr as no matching entry in creditors ledger. Another Cr needed in suspense account.
(c) No effect on TB balancing: salary debited instead of a debtor.
(d) A missing Cr to accruals, so a Cr of 190 in the suspense account is needed to make things balance.
70 + 12000 + 190 ÷ 12260
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