Mainway Dealers Limited maintains a debtors (sales) ledger and a creditors

(purchases) ledger. The monthly accounts of the company for May 19_6 are now being prepared and the following information is available.

It has been decided to set off a debt due from a customer, L. Green, of £300 against a debt due to L. Green of £1,200 in the creditors’ ledger.
* Included in cash and cheques received May 19_6 £15 497.
The company has decided to create a provision for doubtful debts of 24%
of the amount due to Mainway Dealers Limited on 31 May 1986 according to the debtors’ ledger control account.
Required:

(a) Prepare the debtors’ ledger control account and the creditors’ ledger control account for May 19_6 in the books of Mainway Dealers Limited. (20 marks)

(b) An extract of the balance sheet as at 31 May 19_6 of Mainway Dealers Limited relating to the company’s trade debtors and trade creditors.

Transcribed Image Text:

Debtors' ledger as at 1 May 19_6: Debit balances Credit balances Creditors' ledger as at 1 May 19_6. Debit balances Credit balances 16 720 1146 280 7 470 Credit sales May 19_6 Credit purchases May 19_6 Cash and cheques received May 19_6: Debtors' ledger 19 380 6 700 15 497 Creditors' ledger 130 470 6.320 Cheques paid May 19_6: Debtors' ledger Creditors' ledger Credit notes issued May 19_6 for goods returned by customers Credit notes received from suppliers May 19_6 for goods returned by Mainway Dealers Limited * Cheques received and subsequently dishonoured May 19_6: Debtors' ledger Discounts allowed May 19_6 Discounts received May 19_6 Bad debts written off May 19_6 * Bad debt written off in December 19_5 but recovered in May 19_6 (R. Bell) Debtors' ledger as at 31 May 19_6: Debit balances Credit balances Creditors' ledger as at 31 May 19_6: Debit balances 1 198 240 320 430 338 131 142 To be determined 670 365 Credit balances To be determined