John owns and manages a small business which sells organic beauty products to high street shops.  John sells to the shops on credit at 30 days credit terms. (John manages all aspects of the business, including ordering, delivery and managing the accounts.) The business accounts are balanced at the end of each month, and the transactions are posted daily.

On 1 July, the balances on John's general ledger accounts were as follows:

Account name	Debit (£)	Credit (£)
Capital		63,000
Van (at net book value)	30,000
Bank	1,500
Receivables control	62,000
Payables control		30,500
	93,500	93,500

On 1 July, the debit balances on the receivables ledger accounts were as follows:

Receivables ledger accounts	£
Shampoo	5,910
Soap	23,520
Shower Gel	32,570
Total	62,000

On 1 July, the credit balances on the payables ledger accounts were as follows:

Payables ledger accounts	£
Lemon	4,601
Rose	25,899
Total	30,500

During July, the following transactions took place:

No.	Date	Amount (£)	Transaction
1	2 July	5,200	John pays the business rent from his personal bank account
2	4 July	2,800	John receives payment from shop Shampoo in part settlement of amounts outstanding
3	8 July	9,000	John sells goods to shop Soap on 30 days credit terms
4	9 July	32,570	John receives payment from shop Shower Gel in full settlement of the amount outstanding
5	11 July	10,900	John purchases goods from supplier Lemon on 30 days credit terms
6	17 July	11,200	John pays to supplier Lemon by bank transfer in part settlement of amounts outstanding
7	22 July	25,899	John pays by bank transfer the full amount outstanding on the account of supplier Rose
8	28 July	11,000	John sells goods to shop Shampoo on 30 days credit terms

Required:

a.Set out John's general ledger accounts and the receivables and payables ledger accounts on 1 July.

 

b. Balance off the general ledger accounts and the receivables and payables ledger accounts. Demonstrate that the balance on the receivables control account agrees with the total of the balances on the personal accounts in the receivables ledger. Do the same for the payables control account and the personal accounts in the payables ledger. Show all relevant details for all T-accounts.

 

c Present the trial balance at 1 August.