Reference no: EM132559729

Question 1 - Tolu is a sole trader. When his trial balance failed to agree a suspense account was opened up for the difference of $5,234 (debit balance). Following this, further investigation was undertaken and the following errors were found.

1. The receivables balance of $4,555 had been omitted from the trial balance.

2. £20,450 paid to purchase a new van had been debited to motor expenses.

3. The discounts allowed column totaling $300 in the cash book had not been posted to the nominal ledger.

4. Carriage outwards of $2,360 had been recorded as a credit balance in the trial balance.

What balance remains on the suspense account after making the necessary entries to correct the above errors?

$1,681 credit balance

$5,069 debit balance

$4,041 credit balance

$4,041 debit balance

Question 2 - A company has an opening tax liability of $55,000. Tax paid during the year was $56,500. The estimated tax liability for the current year is $48,000.

What is the total tax charge to be shown in the statement of profit or loss for the year?

$48,000

$46,500

$1,500

$49,500