Mudgee Ltd issued the following invoices to customers in respect of credit sales made during the last week of May 19X7. The amounts stated are all net of Value Added Tax. All sales made by Mudgee Ltd are subject to VAT at 15%.

Invoice No Date Customer Amount r

3045 25 May Laira Brand t

1,060.00 3046 27 May Brown Bros 2,200.00 3047 28 May Penfold’s 170.00 3048 29 May T Tyrrell 460.00 3049 30 May Laira Brand 1,450.00

£5,340.00 On 29 May Laira Brand returned half the goods (in value) purchased on 25 May. An allowance was made the same day to this customer for the appropriate amount.

On 1 May 19X7 Laira Brand owed Mudgee Ltd £2,100.47. Other than the purchases detailed above Laira Brand made credit purchases (including VAT) of £680.23 from Mudgee Ltd on 15 May. On 21 May Mudgee Ltd received a cheque for £2,500 from Laira Brand.

Required:

(a) Show how the above transactions would be recorded in Mudgee Ltd’s Sales Book for the week ended 30 May 19X7.

(b) Describe how the information in the Sales Book would be incorporated into Mudgee Ltd’s double entry system.

(c) Reconstruct the personal account of Laira Brand as it would appear in Mudgee Ltd’s ledger for May 19X7.

(Association of Accounting Technicians)