Mr. Lalit was unable to agree the Trial Balance last year and wrote off the difference to the profit and loss account of that year. On verifying the…

Journal Entries in the books of Mr. Lalit Date Particulars Dr. (₹) Cr. (₹) (i) Profit & Loss Adjustment A/c Dr. 16,000 To Suspense* A/c 16,000 (Purchase Account under cast in the previous year; error now rectified) (ii) Rashmi’s Account Dr. 5,000 To Profit & Loss Adjustment A/c 5,000 (Sales to Rashmi omitted last year; now adjusted) (iii) Anubhav’s Account Dr. 1,200 To Ashok’s Account 1,200 (Amount received from Ashok wrongly posted to the account of Anubhav now rectified) (iv) Profit & Loss Adjustment A/c Dr. 450 To Suspense* A/c 450 (Excess posting to sales account last year,4,617, instead of 4,167 now adjusted) (v) Profit & Loss Adjustment A/c Dr. 6,100 To Machinery A/c 6,100 (Repairs to Machinery was wrongly debited to Machinery account, now rectified) (vi) Profit & Loss Adjustment A/c Dr. 6,000 To Mr. David A/c 6,000 (Credit purchase of goods from Mr. David sale last year, now rectified) (vii) Lalit’s Capital A/c Dr. 23,550 To Profit and Loss Adjustment Account 23,550 (Being balance in P & L Adjustment Account transferred to Lalit’s Capital A/c – Refer W.N.1) (viii) Suspense A/c Dr. 16,450 To Lalit’s Capital A/c 16,450 (Being balance of Suspense A/c transferred to Capital A/c– Refer W.N.2) *Considering that the difference was posted to Suspense account. Working Notes 1. Profit and Loss Adjustment Account Particulars ₹ Particulars ₹ To Suspense A/c 16,000 By Rashmi’s A/c 5,000 To Suspense A/c 450 By Lalit’s Capital A/c (Bal. Transfer) 23,550 To Machinery A/c 6,100 To Mr. David’s A/c 6,000 28,550 28,550 2. Suspense Account Particulars ₹ Particulars ₹ To Lalit’s Capital A/c (Balance Transfer) 16,450 By P & L Adj. A/c 16,000 By P & L Adj. A/c 450 16,450 16,450