Page 137 - DEBK-XI(2020)

17.4 Double Entry Book Keeping — CBSE XI

Solution:
RECTIFYING JOURNAL ENTRIES
Date Particulars L.F. Dr. (`) Cr. (`)
(i) Sales Return A/c ...Dr. 5,000
To Customer’s A/c 5,000
(Being the rectification of goods returned by a customer omitted from books)

(ii) Purchases A/c ...Dr. 15,000
To Mohan & Co. 15,000
(Being the rectification of purchase of goods from Mohan & Co.
omitted from books)
(iii) Purchases Return A/c ...Dr. 5,000
Sales Return A/c ...Dr. 5,000
To Mohan 10,000
(Being the rectification of returns from Mohan passed through
Purchases Return Book)
(iv) Sohan ...Dr. 16,000
To Sales Return A/c 8,000
To Purchases Return A/c 8,000
(Being the rectification of Purchases Return to Sohan passed through
Sales Return Book)

(v) Bills Receivable A/c ...Dr. 2,000
Bills Payable A/c ...Dr. 2,000
To Ram 4,000
(Being the rectification of Bills Receivable from Ram passed through
Bills Payable Book)

STATEMENT SHOWING EFFECT OF RECTIFICATION OF ERRORS ON NET PROFIT
Effect on Net Profit Dr. (`) Cr. (`)
(i) Reduce Profit by 5,000 ...
(ii) Reduce Profit by 15,000 ...
(iii) Reduce Profit by 10,000 ...
(iv) Increase Profit by ... 16,000
(v) No effect ... ...
30,000 16,000
Net Decrease in Profit (` 30,000 – ` 16,000) ... 14,000
30,000 30,000

4. Pass rectification entries for the following transactions:
(i) A builder’s bill for ` 20,000 for erection of a small shed was debited to Repairs
Account.
(ii) Repairs to plant amounting to ` 5,000 had been charged to Plant and
Machinery Account.
(iii) Wages paid to the firm’s workmen for making certain additions to machinery
amounting to ` 7,000 were debited to Wages Account.