At the end of January 20X3 a trial balance extracted #8220

At the end of January 20X3 a trial balance extracted from the ledger of Gerald Ltd did not
balance and a suspense account was opened for the amount of the difference. Subsequently,
the following matters came to light:1. £234 had been received during January from a credit
customer who owed £240. No entry has been made for the £6 outstanding but it is now decided
to treat it as a cash discount.2. Returns to suppliers during January were correctly posted
individually to personal accounts but were incorrectly totaled. The total, overstated by £100, was
posted to the returns account.3. A bank statement drawn up to 31 January 20X3 showed a
credit balance of £120 while the balance of the bank account in the trial balance was an
overdraft of £87. The difference was found on reconciliation to comprise:a. Direct debit for the
annual subscription to a trade association of £70, for which no entry had been made in the
books of account;b. An entry in the bank account for payment to a supplier shown as £230
instead of £320;c. Un-presented cheques on 31 January totaled £327;d. The remainder of the
difference was due to an addition error in the bank account.4. A cheque for £163 was received
during January in full settlement of a debt that was written off in the previous financial year. It
was correctly entered in the bank account but not posted elsewhere, pending instructions.5. A
credit customer's account with a balance of £180 had been taken out of the loose leaf ledger
when a query was investigated and not replaced at the time the trial balance was extracted.6. A
credit note for £5 sent to a customer in respect of an allowance had been posted to the wrong
side of the customer's personal account.RequiredShow what correcting entries need to be
made in the ledger accounts in respect of these matters. Set out your answer as follows:Item
........................ Account(s) to be debited £ ...................Account(s) to be credited £View Solution:
At the end of January 20X3 a trial balance extracted

ANSWER
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