Control accounts
QUESTION ONEThe financial year of The Better Trading Company ended on 30 November 2017. You have been asked to prepare a Total Debtors Account and a Total Creditors Account in order to produce end-of-year figures for Debtors and Creditors for the final accounts draft.
You are able to obtain the following information for the financial year from the books of original entry:
| TZS | |
|---|---|
| Sales – cash | 344,890 |
| – credit | 268,187 |
| Purchases – cash | 14,440 |
| – credit | 496,600 |
| Total receipts from customers | 600,570 |
| Total payments to suppliers | 503,970 |
| Discounts allowed (all to credit customers) | 5,520 |
| Discounts received (all from credit suppliers) | 3,510 |
| Refunds given to cash customers | 5,070 |
| Balance in the sales ledger set off against balance in the purchases ledger | 70 |
| Bad debts written off | 780 |
| Increase in the provision for bad debts | 90 |
| Credit notes issued to credit customers | 4,140 |
| Credit notes received from credit suppliers | 1,480 |
According to the audited financial statements for the previous year debtors and creditors as at 1 December 2016 were T.shs 26,555 and T.shs 43,450 respectively.
Required:
Draw up the relevant Total Accounts entering end-of-year totals for debtors and creditors.
QUESTION TWOThe balances on the personal ledger control account of Galaxy Ltd at 31st December 2019 were as follows:
| Particulars | Dr (TZS) | Cr (TZS) |
|---|---|---|
| Purchases ledger | 960 | 56,900 |
| Sales ledger | 97,550 | 480 |
The following transactions take place during 2020:
| Total purchases | 194,000 |
| Total sales | 251,000 |
| Cash purchases | 6,000 |
| Cash sales | 5,000 |
| Returns inward | 500 |
| Returns outward | 900 |
| Bills received | 7,000 |
| Bills dishonoured | 1,000 |
| Bills payable to creditors | 6,500 |
| Noting charges on dishonoured bills | 50 |
| Payments to creditors | 110,000 |
| Receipts from cash and credit sales | 180,000 |
| Receipts from bad debts recovered | 2,000 |
| Bad debts written off | 5,500 |
| Increase in provision for bad debts | 1,500 |
| Refunds of credit customers' overpayments | 700 |
| Refunds given to cash customers | 330 |
| Allowances to trade debtors on goods damaged | 900 |
| Interest charged to customers | 200 |
| Cash received in respect of debit balances in purchases ledger | 600 |
| Balance in the sales ledger set off against balance in the purchases ledger | 2,500 |
Balances at 31st December 2020 included:
| Sales ledger | T.shs 1800 Cr. |
| Purchases ledger | 760 Dr. |
Required:
Prepare the sales ledger control account and the purchases ledger control account.
QUESTION THREENyanjilinji Ltd keeps control accounts for the purchases and sales ledgers. The following details were extracted from the books for the month of March 2020:
| T.shs | |
| Balances on 1 March 2020: | |
| - Purchases ledger - debit | 2,000 |
| - Purchases ledger - credit | 50,000 |
| - Sales ledger - debit | 90,000 |
| - Sales ledger - credit | 5,000 |
| Goods purchased on credit | 190,000 |
| Discounts allowed | 3,000 |
| Bad debts written off | 2,000 |
| Goods returned to suppliers | 6,000 |
| Discounts received | 2,500 |
| Cash received from credit customers | 240,000 |
| Legal expenses charged to customers | 1,200 |
| Provision for bad and doubtful debts | 3,000 |
| Total sales | 390,000 |
| Cash paid to creditors | 160,000 |
| Cash sales | 115,000 |
| Sales ledger credit balances on 31 March 2020 | 3,700 |
| Purchases ledger debit balances on 31 March 2020 | 1,400 |
You are Required to:
Prepare control accounts for the month ended 31 March 2020 for the purchases ledger and for the sales ledger
QUESTION FOURMgala Designers Ltd. maintains its credit customer accounts on daily basis. The following details refer to transactions during the month ended 21st June 2018:
| T.shs | |
| Debit balances at 22nd May 2018 | 130,000 |
| Credit balances at 22nd May 2018 | 6,000 |
| Allowances given against disputed debts | 2,000 |
| Credit Sales during the month | 1,200,000 |
| Irrecoverable balances transferred to Bad Debts account | 8,000 |
| Balances referred to Debt Collectors | 12,000 |
| Cash and cheques received during the month | 900,000 |
| “Service Charges” added to unpaid accounts | 13,000 |
| Credit Notes issued during the month in respect of sales goods returned by customers | 40,000 |
| Dishonoured cheques | 7,000 |
| Cash refunds to customers | 4,900 |
| Confirmed credit balances on customer accounts at 21st June 2018 | 4,500 |
Required:
Write up the Control Account of the Debtors ledger.
QUESTION FIVENgangamero Ltd. includes in its accounting system a purchases ledger control account and a sales ledger control account. The company’s trial balance at 30 November 2019 included the following entries:
| Dr. | Cr. | |
| Purchases ledger control account | 1,200 | 24,000 |
| Sales ledger control account | 39,000 | 1,200 |
The following is a summary of the company’s transactions with its suppliers and customers during the year ended 30 November 2020:
| T.shs | |
| Goods purchased and received form suppliers: | |
| - Gross invoice value before trade discounts | 210,000 |
| - Net invoice price after trade discounts | 176,000 |
| Goods returned to suppliers: | |
| - Gross invoice value before trade discounts | 16,000 |
| - Net invoice price after trade discounts | 15,000 |
| Amount due to suppliers: | |
| - Total full amount | 163,000 |
| - Settled by payment of | 159,400 |
| Goods sold to customers: | |
| - Gross invoice value before trade discounts | 344,700 |
| - Net invoice price after trade discounts | 310,000 |
| Goods returned from customers: | |
| - Gross invoice value before trade discounts | 7,600 |
| - Net invoice price after trade discounts | 6,700 |
| Amount due from customers: | |
| - Full amount | 307,610 |
| - Settled by receipt of | 306,500 |
| Customers debts written off as irrecoverable | 970 |
You are Required to:
Prepare control accounts for the month ended 30 November 2020 for the purchases ledger and for the sales ledger