| Weighted Average Cost Per Unit= | Total Cost of Goods in Inventory |
| Total Units in Inventory |
![IMG-20170828-WA0017[1]](https://fadhilconsult.files.wordpress.com/2017/08/img-20170828-wa00171.jpg)
| Solution: |
| Particular | Amount (RM) | Particular | Amount (RM) |
| To Materials | 44,250 | By Work-in-progress: | |
| To Plant and Tools | 12,200 | Work Certified | |
| To Labour Charges | 56,180 | ( 1,00,000 x 100/80) 1,25,000 | |
| To General Charges | 4,650 | Work Uncertified 6,145 | 1,31,145 |
| To Notional Profit c/d | 25,290 | By P & L account | 1,300 |
| By materials return to store | 2,125 | ||
| By Plant and Tools at site | 8,000 | ||
| 1,42,570 | 1,42,570 | ||
| To P & L A/c ( 25,290 x 2/3) | 16,860 | By Notional Profit b/d | 25,290 |
| To work in progress(reserve) | 8,430 | ||
| 25,290 | 25,290 |
| Liabilities | RM | Assets | RM | ||
| Share Capital | 40,000 | Bank | 45,000 | ||
| P & L A/c 16,860 | Land and Building | 25,000 | |||
| Less : 1,300 | 15,560 | Plant and Tools | 8,000 | ||
| Sundry CreditoRM | 4,380 | Materials at store | 2,125 | ||
| Contract A/C : | |||||
| Work in progress | |||||
| Work Certified 1,25,000 | |||||
| Work uncertified 6,145 | |||||
| Less : Reserve 8,430 | |||||
| Less : Cash Recd. 1,00,000 | 22,715 | ||||
| 59,940 | 59,940 |
| Examples | Correcting journal entries |
| $ | |
| A credit sale of $150 to Mr. Chan has been omitted from his account. | |
A sale to C. Lee for $250 was correctly entered in the sales book but entered in C. Lee’s account as $520. | |
| A credit sale of $100 has been credited to H. Cheung’s account | |
Sales day book was overcast by $200 | |
Sales account was undercast by $40 | |
The total of the sales account of $1,500 has been omitted from the trial balance | |
The total of the sales account of $1,500 has been extracted as $1,200 in the trial balance. | |
The total of the sales account of $1,500 has been extracted to the debit column of the trial balance |
| Item #1. | The bank statement for August 2016 shows an ending balance of $3,490. |
| Item #2. |
On August 31 the bank statement shows charges of $35 for the service charge for maintaining the checking account.
|
| Item #3. |
On August 28 the bank statement shows a cheque return of $100 plus a related bank fee of $10. The return cheque is a customer's cheque that was returned because of insufficient funds.
|
| Item #4. |
The bank statement shows a charge of $80 for cheque printing on August 20.
|
| Item #5. |
The bank statement shows that $8 was added to the checking account on August 31 for interest earned by the company during the month of August.
|
| Item #6. |
The bank statement shows that a note receivable of $1,000 was collected by the bank on August 29 and was deposited into the company's account. On the same day, the bank withdrew $40 from the company's account as a fee for collecting the note receivable.
|
| Item #7. |
The company's Cash account at the end of August shows a balance of $967.
|
| Item #8. |
During the month of August the company wrote cheques totalling more than $50,000. As of August 31 $3,021 of the cheques written in August had not yet cleared the bank and $200 of cheques written in June had not yet cleared the bank.
|
| Item #9. |
The $1,450 of cash received by the company on August 31 was recorded on the company's books as of August 31. However, the $1,450 of cash receipts was deposited at the bank on the morning of September 1.
|
| Item #10. |
On August 29 the company's Cash account shows cash sales of $145. The bank statement shows the amount deposited was actually $154. The company reviewed the transactions and found that $154 was the correct amount.
|
| Error type | Suspense account involved? | |
|---|---|---|
| 1 Omission – a transaction is not recorded at all | No | |
| 2 Error of commission – an item is entered to the correct side of the wrong account (there is a debit and a credit here, so the records balance) | No | |
| 3 Error of principle – an item is posted to the correct side of the wrong type of account, as when cash paid for plant repairs (expense) is debited to plant account (asset) (errors of principle are really a special case of errors of commission, and once again there is a debit and a credit) | No | |
| 4 Error of original entry – an incorrect figure is entered in the records and then posted to the correct account Example: Cash $1,000 for plant repairs is entered as $100; plant repairs account is debited with $100 | No | |
| 5 Reversal of entries – the amount is correct, the accounts used are correct, but the account that should have been debited is credited and vice versa Example: Factory employees are used for plant maintenance: Correct entry: Debit: Plant maintenance Credit: Factory wages Easily done the wrong way round | No | |
| 6 Addition errors – figures are incorrectly added in a ledger account | Yes | |
| 7 Posting error a. an entry made in one record is not posted at all b. an entry in one record is incorrectly posted to another Examples: cash $10,000 entered in the cash book for the purchase of a car is: a. not posted at all b. posted to Motor cars account as $1,000 | Yes | |
| 8 Trial balance errors – a balance is omitted, or incorrectly extracted, in preparing the trial balance | Yes | |
| 9 Compensating errors – two equal and opposite errors leave the trial balance balancing (this type of error is rare, and can be because a deliberate second error has been made to force the balancing of the records or to conceal a fraud). Yes, to correct each of the errors as discovered | Yes, to correct each of the errors as discovered |
