WAEC Accounting 2014 Theory — Question 12

8. The trial balance of Asibi as at 31 December 2010 failed to agree. A Suspense Account was opened for the difference, and the draft accounts showed a net profit of GH¢4,000. The following errors were subsequently discovered: (i) Purchases Day Book total of GH¢8,000 posted to the ledger as GH¢16,000 (overcast); (ii) Sales Account undercast by GH¢12,000; (iii) Discount received GH¢700 debited to discounts allowed account; (iv) accrued telephone charge of GH¢600 omitted; (v) Loose tools bought for GH¢400 debited to purchases account; (vi) Purchase of stock for GH¢7,000 not posted to the ledger; (vii) Bad debts of GH¢950 written off in the debtor's account had not been treated in the expense account; (viii) Asibi had withdrawn goods worth GH¢300 for personal use, with no entries made. Required: prepare a Statement showing the effect of the errors on the draft net profit and the corrected net profit for the year.