Complete the template showing the effect of correcting these errors on the Profit for the Year.
You must emphasize the following effect:
Increase or Decrease or No Effect
After preparing his Final Accounts for Year 1, Lee Chad discovered the following errors.
1. £4,000 from the sale of a delivery van was included in the sales revenue total.
2. The Closing Inventory figure omitted inventory worth £300.
3. The accounts failed to include a £500 advertising invoice.
4. A $1,000 electricity bill paid by check was recorded in the Electricity Account but not the Bank Ledger Account.
5. The Repairs account had been credited with £65 for machinery repairs that cost £56.
6. A £20 Discount Allowed was accidentally credited to the Discount Received account.
(a) Fill out the form on Page 12 of your workbook to demonstrate how fixing these errors will affect the profit for the year. You must emphasize the following effect:
Boost, Decline, or No Effect
(a) List two other types of errors that a trial balance would not disclose.
6. A quote for Job 689 is being provided by Garages Direct. Here are the specifics:
Materials 50,000 bricks costing £10 each 1,000-brick bundle.
Mortar costs £1 for every 1,000 bricks.
Windows and the Garage Door: £720
300 hours of labor, of which 50 hours will be compensated at double time in overtime.
£10 per hour is the basic rate.
Overheads $2 per labor hour is what is being charged
VAT is charged at 20%, and markup is applied at 50%.
Create a quote for the client stating the Selling Price of Job 689 on Page 13 of your Workbook.
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