Complete the template showing the effect of correcting these errors on the Profit for the Year. You must highlight the effect as follows

Complete the template showing the effect of
correcting these errors on the Profit for the Year. You must highlight the effect as
follows:
Increase or Decrease or No Effect

5. After preparing his Final Accounts for Year 1 Lee Chad discovered the following
errors.
1. The Sales Revenue figure included £4,000 for the sale of a delivery van.
2. Inventory valued at £300 was missing from the Closing Inventory figure.
3. An invoice for advertising for £500 had been omitted from the accounts.
4. A bill for electricity, £1,000, paid by cheque had been entered in the Electricity
Account but had not been entered in the Bank Ledger Account.
5. Repairs to Machinery costing £56 had been entered in the Repairs account as
£65.
6. Discount Allowed of £20 was entered in the Discount Received account in error.
(a) On Page 12 of your Workbook, complete the template showing the effect of
correcting these errors on the Profit for the Year. You must highlight the effect as
follows:
Increase or Decrease or No Effect
(b) State the name of 2 types of error which would not be revealed by a Trial
Balance.
6. Garages Direct is providing a quote for Job 689. Details are as follows:
Materials 50,000 bricks at a cost of £10 per pack of 1,000 bricks
Mortar at a cost of £1 per 1,000 bricks
Garage Door and Windows – £720
Labour 300 hours – of which 50 hours will be overtime paid at double time.
Basic rate is £10 per hour.
Overheads Charged at a rate of £2 per labour hour
Mark-up is at the rate of 50% and VAT is charged at 20%
On Page 13 of your Workbook, prepare a quote for the customer clearly showing the
Selling Price of Job 689.


 

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