- 15 Marks
Question
At the close of business on 31 July 2023, the following balances were extracted from the books of Akrowa, a limited liability company:
| GH¢ |
|---|
| Receivables Ledger Control Account |
| Payables Ledger Control Account |
During August 2023, the following transactions occurred:
| Transaction | GH¢ |
|---|---|
| 1) Cash received from customers | 63,600 |
| 2) Cash paid to suppliers | 65,000 |
| 3) Sales on credit | 96,400 |
| 4) Purchases on credit | 73,000 |
| 5) Sales returns | 3,800 |
| 6) Purchase returns | 1,400 |
| 7) Discounts received from suppliers | 800 |
| 8) Settlement discount claimed by customer unexpectedly | 600 |
| 9) Irrecoverable debts written off | 5,400 |
| 10) Customer and supplier accounts settled by contra | 4,200 |
Required:
i) Prepare the Receivables Ledger Control Account and Payables Ledger Control Account for August 2023 and determine the balances at 31 August 2023.
ii) Identify the book of prime entry from which each of the transactions (1) to (10) originated.
Answer
i) Receivables Ledger Control Account
For the month ended 31 August 2023
| GH¢ | GH¢ |
|---|---|
| Balance b/f (1 Aug 2023) | 95,200 |
| Sales on credit | 96,400 |
| Total | 191,600 |
| Cash received from customers | 63,600 |
| Sales returns | 3,800 |
| Discount allowed (settlement discount) | 600 |
| Irrecoverable debts written off | 5,400 |
| Contra with suppliers | 4,200 |
| Balance c/f (31 Aug 2023) | 114,000 |
| Total | 191,600 |
ii) Payables Ledger Control Account
For the month ended 31 August 2023
| GH¢ | GH¢ |
|---|---|
| Cash paid to suppliers | 65,000 |
| Purchase returns | 1,400 |
| Discounts received | 800 |
| Contra with customers | 4,200 |
| Balance c/f (31 Aug 2023) | 76,400 |
| Total | 147,800 |
| Balance b/f (1 Aug 2023) | 74,800 |
| Purchases on credit | 73,000 |
| Total | 147,800 |
ii) Books of Prime Entry
| Transaction | Book of Prime Entry |
|---|---|
| 1) Cash received from customers | Cash Book (Receipts Side) |
| 2) Cash paid to suppliers | Cash Book (Payments Side) |
| 3) Sales on credit | Sales Day Book / Sales Journal |
| 4) Purchases on credit | Purchases Day Book / Purchases Journal |
| 5) Sales returns | Sales Returns Day Book |
| 6) Purchase returns | Purchase Returns Day Book |
| 7) Discounts received from suppliers | Cash Book / General Journal |
| 8) Settlement discount claimed by customer | Cash Book / General Journal |
| 9) Irrecoverable debts written off | General Journal |
| 10) Customer and supplier accounts settled by contra | General Journal |
- Topic: Control accounts and account reconciliations
- Series: Nov 2024
- Uploader: Salamat Hamid