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Question 16 Marks

As on $31-12-2014$ trial balance of Shri Ramanlal does not tally and therefore he has written a difference of $₹ 576$ on the credit side of suspense account and gets his trial balance tallied. Later on, after preparing final accounts the following errors are detected in the next year.
$(1) ₹ 2596$ received from Ashok is posted as $₹ 180$ on the debit side of his account.
$(2) ₹ 1424$ paid for repairing expenses were posted on the debit side of machinery account as $₹ 624 .$
$(3)$ Discount of $₹ 100$ given by Piyush is credited to his account as well as discount received account.
$(4) ₹ 1828$ paid to Narendra is debited to Mahendra's account as $₹ 1028 .$
$(5)$ Total of purhcase book is undercast by $₹ 400 .$
$(6)$ Purchase of furniture of $₹ 1468$ debited to purchase account.
To rectify the above errors, pass necessary rectification entries and prepare suspense account. At the end of the year $2014 ,$ if profit and loss $\mathrm{A} / \mathrm{c}$ discloses a profit of $₹ 31,440$. Find out correct profit after rectification of errors.

Answer

Rectification Entries of Shri Ramanlal

Suspense Account
Because of rectification of these errors the effect on profit-loss can be found out as under :

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Question 26 Marks

Shri Harjit has tallied his trial balance by debiting a difference of $₹ 1000$ to suspense account and thereafter he has prepared final accounts. After preparation of final accounts the following errors are detected.
$(1)$ Goods of $₹ 3500$ returned by Beena is posted on debit side of her account.
$(2)$ Total of purchase return book is overcast by $₹ 800 .$
$(3)$ Harjit has paid $₹ 600$ for his personal medical bill and the amount is debited to miscellaneous expense account.
$(4) ₹ 1200 $ received from Neela for rent is posted to the credit of her account as well as to rent account.
$(5)$ Goods of $₹ 5000$ sold to Surendra is recorded in purchase book.
$(6) ₹ 6000$ paid to Esha for repayment of loan is not posted to her account. From the above information pass rectification entries and prepare suspense account:

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Question 36 Marks

Trial balance of Shri Marmik as on $31-3-15$ does not tally and therefore a difference $Rs. 1,440$ is credited to suspense account. The following errors are detected after final accounts are prepared.
$(1) Rs. 6,490$ received from Paresh is posted as $Rs. 450$ on the debit side of his account.
$(2) Rs. 3,560$ paid for repairing expenses were posted on the debit side of machinery account as $Rs. 1,560.$
$(3)$ Discount of $Rs. 250$ given by Palak is credited to his account as well as discount received account.
$(4) Rs. 4,570$ paid to Sureshbhai is debited to Maheshbhai's account as $Rs. 2,570.$
$(5)$ Total of purchase book is undercast by $Rs. 1,000.$
$(6)$ Purchase of furniture of $Rs. 3,670$ debited to purchase account. To rectify the above errors, pass necessary rectification entries and prepare suspense account. At the end of the year $2015,$ if profit and loss account discloses a profit of $Rs.78,600.$ Find the correct profit after the rectification of errors.

Answer

Journal Proper of Shri Marmik
Date	Particulars		L.F.	Debit(Rs.)	Credit (Rs.)
$1$	Suspense A/c	Dr.		$6,940$	-
	To Paresh A/c.			-	$6,940$
	(Being rectification entry for amount received $Rs.6,490$ fromParesh is posted as $Rs.450$ debit side of his A/c)
$2$	Repairing A/c	Dr.		$3,560$	-
	To Machinery A/c			-	$1,560$
	To Suspense A/c			-	$2,000$
	(Being rectification entry for repairing exp. $Rs.3560$ wrongly recorded $Rs.1,560$ debit side)
$3$	Palak A/c	Dr.		$500$	-
	To Suspense A/c			-	$500$
	(Being rectification entry for Discount given by Palak. Wrongly credited to his A/c)
$4$	Sureshbhai A/c	Dr.		$4,570$	-
	To Maheshbhai's A/c			-	$2,570$
	To Suspense A/c			-	$2,000$
	(Being rectification entry for paid to Sureshbhai’s $Rs.4570$ wrongly debited to Maheshbhai's A/c as $Rs.2570$)
$5$	Purcahse A/c	Dr.		$1,000$	-
	To Suspense A/c			-	$1,000$
	(Being rectification entry for total of purchase book is under casted)
$6$	Furniture A/c	Dr.		$3,670$	-
	To Purchase A/c			-	$3,670$
	(Being rectification entry for purchase of furniture wrongly debited to purchase A/c)
	Total			20,240	20,240

Debit	Suspense A/c						Credit
Date	Particulars	J.F.	Amt.(Rs.)	Date	Particulars	J.F.	Amt.(Rs.)
$1$	Paresh A/c		$6,940$	-	By BalaceB/f		$1,440$
				$2$	Repairing Exp. A/c		$2,000$
				$3$	Palak A/c		$500$
				$4$	Sureshbhai A/c		$2000$
				$5$	Purchase A/c		$1,000$
			6,940				6,940

Effect of Rectification on P & L
Note no.	Particulars	Increase in	Decrease in
Note no.	Particulars	profit (Rs.)	profit (Rs.)
$1.$	Profit-Loss remains unaffected	-	-
$2.$	Profit decrease because repairing exp. A/c is debited	-	$3,560$
$3.$	Profit - Loss remains unaffected	-	-
$4.$	Profit - Loss remains unaffected	-	-
$5.$	Profit decreases because Purchase A/c is debited on	-	$1,000$
$6.$	Profit increases because Purchase A/c is credited	$3,670$	-
		3,670	4,560

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Account Give Answer As Asked .(6 Marks)

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