90.2K

Verified Solution

Link Copied!

At the end of a period the purchases ledger control account had a credit balance of $\mathrm{â‚\neg }73,800$

while the list of balances extracted from the purchases ledger totalled $\mathrm{â‚\neg }57,180.$ An

investigation identified the following:

$1.$ The purchases day book was overcast by $\mathrm{â‚\neg }2,000$

$2.$ The return of goods worth $\mathrm{â‚\neg }4,300$ was debited correctly in the creditors account but no

other entry was made in the books.

$3.$ A contra entry of $\mathrm{â‚\neg }1,650$ was updated in the Davis & Company accounts in both the sales

ledger and purchases ledger, however no entry was made in the control accounts.

$4.$ The credit balance of $\mathrm{â‚\neg }720$ on Maggie Jones Account was omitted from the list of balances.

$5.$ A debit balance $\mathrm{â‚\neg }125$ in the purchases ledger was listed as a credit balance.

$6.$ A transaction for the purchase of goods amounting to $\mathrm{â‚\neg }4,100$ from Harry Moore was posted

to the wrong side of the personal account.

$7.$ Discount received of $\mathrm{â‚\neg }940$ was entirely omitted from the accounting records.

$8.$ A purchase invoice totalling $\mathrm{â‚\neg }870$ was entered in the total Column of the purchases day

book as $\mathrm{â‚\neg }780$ and posted to the personal account as $\mathrm{â‚\neg }780.$

Required

a$)$ The correction of the errors in the Purchases $($Creditor$)$ Control Account

b$)$ A statement showing the adjustments to the List of Creditor Account Balances

Answer & Explanation Solved by verified expert

See Answer