Nadia is a trader. Her financial year ends on 31 March. She extracted a trial balance at 31 March 2020. The debit and credit totals did not agree. The difference was entered into a suspense account. After Nadia prepared draft financial statements, she discovered the following errors. 1 The purchases account was overcast by $110. 2 $13 for discount allowed in February 2020 had been credited to the discount allowed account as $15. 3 A payment for insurance, $220, was correctly recorded in the cash book, but was recorded as $202 in the insurance account. 4 Commission received, $65, had been debited to the account for commission payable. The entry to the cash book had been correctly made. 5 Cash drawings, $85, were correctly entered in the cash book but were credited to the drawings account. 6 The cost of a vehicle repair, $190, had been debited to the motor vehicles account. 7 A payment of $100 to Robert had been posted to the account of Roberta. REQUIRED

1. (a)Prepare the suspense account. Include the original difference on the trial balance as a balancing figure. Nadia Suspense account Date Details $ Date Details $[7]
2. (b)(i)Identify the type of error made in (i) Error 6[1]
3. (b)(ii)(ii) Error 7[1]
4. (c)Complete the following statement to show the effect on the profit for the year of correcting errors 2–7. If there is no effect on profit write ‘nil' in the 'no effect' column. Calculate the corrected profit for the year. Ignore depreciation of non-current assets. The first correction has been completed as an example. Nadia Statement of corrected profit for the year ended 31 March 2020 Draft profit for the year before corrections $ 6720 No Effect Increase in profit $ Decrease in profit $ Error 1 110 Error 2 Error 3 Error 4 Error 5 Error 6 Error 7 Corrected profit for the year[7]
5. (d)Prepare journal entries to record 1 and 2 above. Narratives are not required. Nadia Journal Date Details Debit $ Credit $[4]