Ujenzi Enterprises is a small retail firm. The trial balance of the firm failed to agree on 30 June 2022.
Assignment Task
a) Ujenzi Enterprises is a small retail firm. The trial balance of the firm failed to agree on 30 June 2022. The difference was transferred to a suspense account and financial statements prepared. On detailed review of the books, the following errors were revealed:
- The purchases daybook had been undercast by Sh.1,200,000.
- Purchases on credit from Demario Ltd. for Sh.600,000 had been posted to their account as Sh.6,000,000.
- A purchase of a machine worth Sh.8,400,000 had been posted to repairs of machinery account.
- A customer returned goods worth Sh.1,200,000. This transaction had been entered in the sales returns daybook and posted to the debit of the customer`s account.
- Sh.7,200,000 owed by Jeru Ltd., a customer, had been omitted when drawing up a schedule of debtors from the ledger.
- A cash discount of Sh.240,000 had been correctly entered in the cashbook but has not been posted to the customer`s account.
Required:
(1) Journal entries to correct the above errors.
(2) Suspense account duly balanced (including the opening balance).
i) Prepare the Statement of Profit and loss for the year ended 31st October 2021
