Reference no: EM132549966

The suspense account of Lubuto Ltd has a credit balance of K115, 500. Upon investigation, the following errors were discovered:

(1) The cash book balance was overcast by K20, 000 while sales of K100, 000 were recorded only in the bank.

(2) Motor vehicle additions of K13, 311 were recorded as K11, 311.

(3) General administration expenses of K16, 000 were recorded correctly in the cash account but recorded as K21, 000 in the expense account.

(4) Sales of K750 were recorded correctly in the sales account and recorded on the credit side of the trade receivables account.

(5) Rental expenses of K6, 000 were recorded as K600 while returns outwards were recorded as K1, 600 instead of K7, 000.

(6) Insurance expenses of K3, 000 were recorded on the credit side of the insurance account.

Question 1. What entry was made in the suspense account in relation to the motor vehicle additions in note (2)?

Question 2. What entry should be made in the suspense account to correct the error in relation to the trade receivables in note (4)?

Question 3. What entry should be made in the suspense account to correct the rental error made in note(5)?

Question 4. What entry should be made in the suspense account to correct the returns outwards error in note (5)?

Question 5. What entry should be made in the suspense account to correct the insurance error in note (6)?