Page 307 - Accountancy_F5

After internal audit, the following errors were detected.
(a) Salaries paid were correctly recorded in cash book but wrongly posted in rent
account amounted to TZS 3,950,000

(b) On 31 Dec. 2021, cash balance was TZS 7,725,000.
st
(c) Debtors account was under casted by TZS 2,000,000.
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(d) Cash paid to Noria amounted TZS 1,000,000 was debited to Norhan as TZS
100,000.

(e) Discount received was posted to discount allowed amounting TZS 2,200,000.
(f) Cash purchases amounting to TZS 7,900,000 were recorded in cash book only.
LANGUAGE EDITING
You are required to prepare:

(i) Journal entries to rectify the errors;
(ii) Suspense account;

(iii) Statement of corrected net profit; and
(iv) The statement of financial position as at 31 Dec, 2021 after rectification of the
st
errors.

Solution 9.8 (i)

Kipande Enterprises
General journal

S/N Details TZS TZS
Salaries account 3,950,000

(a) Rent account 3,950,000
Being a wrong account postage now corrected
Cash account 450,000
Suspense account 450,000
(b)
Being the amount undercasted in cash account now
corrected
Debtors account 2,000,000

Suspense account 2,000,000
(c)
Being the amount undercasted in debtors account
now corrected

Student’s Book Form Five
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