2020 PHS 3N POA EOY P2 Q4

2020 PHS 3N POA EOY P2 Q4

4 Ryan Raspberries recently hired an inexperienced accounts clerk, Gabriel. The following trial balance of the business prepared by Gabriel contained errors.

Trial balance for 30 September 2020

 

Dr ($)

Cr ($)

Bank loan

 

9 000

Capital

20 200

 

Cash at bank

11 120 

 

Cost of sales

 

10 200 

Discount received

100

 

Drawings

880

 

Inventory

27 000

 

Office equipment

5 100 

 

Sales returns

 

1 700

Sales revenue

32 250

 

Trade payables

 

10 050

Trade receivables 

 

9 600

Utilities

 

6 000 

Additional information:

Gabriel forgot to include the following transactions during the preparation of the trial balance.

1. Ryan, the owner, took a printer, $600, for personal use.

2. Ryan withdrew $3 000 from the business bank account for office use.

REQUIRED

a. Prepare the adjusted trial balance as at 30 September 2020.

[10]

b. State two purposes of preparing trial balance.

[2]

[TOTAL 12]

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Check for arithmetic accuracy in recording of the ledger accounts.

Facilitate the preparation of financial statements.

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