Question
PART A
(a) Discuss the main objectives of non- profit-making organisations.
(b) Explain the main differences between the final accounts of a profit and a non- profit-making organisation.
PART B
Mr. Antish extracted a Trial Balance at 31 December 2009 and establish that it did not balance. He posted the dissimilarity to a Suspense Account. Later he found the following errors that accounted for the difference:
1. The total of $365 for Discount Allowed for month of July had been posted to the credit side of Discount Received Account.
2. A payment of $ 210 to Mr Antish from a debtor Mr XY had been posted to credit of Mr TEY in error.
3. Mr Antish had paid $ 2,640 wages and supplied materials costing $960 to his own employees in building a personal shed at the rear of his factory. No adjustment had been made in the accounts.
4. Payment of $56 for Postage had been posted to that account as $65.
5. Mr Antish bought new fittings for his industrial unit costing $1,800 but this transaction had been posted to the Purchases Account.
6. A payment of $96 for an electricity bill had been entered in the Cash Book but the double entry had not been made.
Required-
(i) Arrange Journal entries necessary to correct the errors and omission.
(ii) Arrange Suspense Account showing the original difference in the Trial Balance.
(iii) Illustrate impact of the above errors on the net profit of Mr. Antish. You might assume that the net profit, prior to these errors was $1568.