[tsztung]

I really don't understand this trial balance question!it says on the 4th error that no entry has been made for sundry expenses but in this wrong trial balance, it is recorded that sundry expenses,$3600. How come there is entry and the error say no entry? Its just the wrong amount. And also I don't get a balanced amount after I corrected the sundry expenses' amount. This is so confusing. I had to finish it by tonight because I have to pass it up tomorrow so can you please help me out? I would really appreciate it. Thanks a lot! =D

John Ameobi is a trader. He has little knowledge of accounting, but attempted to prepare a trial balance at the end of his financial year. The trial balance he prepared is shown below.
John Ameobi
trial balance for the year ended 30 November 2008

Purchases- $174 900 Cr
Sales (Revenue)-$246 500 Dr
Carriage inwards- $5 650 Dr
Carriage outwards- $4 210 Cr
Bank overdraft- $14 500 Dr
Sundry expenses- $3 600 Cr
Equipment- $5 700 Dr
Motor vehicles- $10 400 Dr
Salaries- $62 590 Cr
Debtors (trade receivable)- $21 610 Cr
Creditor (trade payable)- $16 440 Dr
Rent and rates- $7 990 Dr
Insurance- $3 200 Cr
Stock (inventory) 1 December 2007- $14 850 Dr
Loan to employee- $1 000 Cr
Capital (balancing figure)- $50 920 Cr
Total balance= $322 030

In addition to the obvious errors in the above trial balance, the following errors has also been discovered:

1. Drawings, $1 400, have been omitted from the trial balance
2. A cheque, $90, paid to Chan, a creditor, has been debited to Chen's account
3. Both the salaries account and the purchases account have been undercast by $1 000
4. No entry has been made for sundry expenses, $2 150, paid by cheque

(a) state how each of the above errors will affect the trial balance. Give a reason for your answer for each case. ( if can, can you please also help me with this question? If you can't then never mind)
(b) prepare an amended trial balance for John Ameobi at 30 November 2008.

[pready]

For number 1, you need to add $1,400 to the Capital Drawing account and subtract $1,400 from your Cash account.
This transaction will not account your trial balance.

For number 2, you need to figure out who Chen is. If he is a customer that owes you money, then you would have credit his account for $90 and subtract $90 from your account payable balance.
This will increase your trial balance by $90

If Chen is a vendor that you owe money to, then you will increase your account balance for $90 and Decrease Chan's account balance for $90. This transaction will offest your Accounts Payable account, therefore no change in your trial balance.

For number 3 you need to increase your salaries and purchases account by $1,000 each.
This will increase the debit side of your trial balance by $2,000

For number 4, you need to add $2,150 to the Sundry Expenses Account balance and subtract $2,150 from your Cash balance.
This transaction will not affect the trial balance because you you are increasing one debit balance and subtracting one debit balance by the same amount)in other words the individual transactions offset each other for the overall balance).

[pready]

Also a lsome of your balances need to be changed from Debit balance to a Credit balance, and vice versa.

Here is a list of what your account balances should be in terms of a debit or credit balance:

D Debit Balance
E Expenses
A Assets
D Dividends or Drawing

C Credit Balance
U Unearned Revenues
R Revenues
L Liabilities
S Shareholder Equity or Owners Equity