Reference no: EM132531626
Question - Eugene Brill is finalising his accounting records for the financial year ended 30th April 2020. When he extracted the trial balance for his business, he identified a difference of €10,649 between the debit column and the credit column of the trial balance, with the debit balance being lower. From the draft trial balance, he has calculated a net profit of €235,845 for the year ended 30th April 2020. After checking through the accounting records, Eugene identifies the following:
1. An invoice for credit sales of €14,600 to Right-Price Ltd has been recorded as a credit sale in the ledger account of Wright & Sons.
2. An invoice for credit purchases of €12,300 from Tipp Ltd has been recorded as credit purchases to the value of €13,200 in the ledger account of Tipp Ltd but correctly stated in the purchases daybook.
3. The purchases daybook correctly totalled €965,000. However, €955,000 was posted to the purchases account in the general ledger.
4. To record the purchase of computer equipment for use in the business, the journal entry posted resulted in a debit to computer equipment of €5,600 and a credit to accounts payable of €5,600. The purchase of computer equipment was paid for by Eugene from his own personal bank account.
5. Motor expenses of €1,550, paid by way of direct debit from the business bank account, have been expensed in the trial balance. Of the total amount of €1,550, €550 relates to car repairs made to a car owned by Eugene's daughter.
6. Routine repairs to machinery costing €1,340 have been debited to the machinery account. This has resulted in a charge for depreciation of €134.
7. A cheque of €3,465 received from a customer has been correctly recorded in the customer's account and but debited to the bank account as €3,666.
8. The balance brought down on the telephone expense account and consequently the telephone expense balance per the trial balance is overstated by €500.
9. The petty cash balance of €450 has been omitted from the draft trial balance.
10. A bank transfer was made to Victor Shine of €780. The payment represented a refund due to Victor Shine, a customer of the business. However, in the ledger accounts it has been recorded as a payment of €780 to Rob Symth, a supplier of the business.
Required - Make the journal entries required to correct the errors (1) to (10) above. Journal descriptors are not required.