John Phelps’ bank transactions for the year January 1 through December 31,  2020 were as follows

 Bank Account Receipts $ Payments $  Trade receivables 430,100 Trade payables 272,500  Debit card 40,000 Electricity 4,500  Rates and rent 23,600  Loan principal 25,000  Drawings 1,250  Computer equipment 150,000  Overdraft interest 750  Salaries & wages 26,000  Accounting fee 7,500  470,100 511,100  

2. The bank account had a favourable balance on December 31, 2020 of $47,900 before considering Note 3(e) and Note 6 below. 

3. During the year: a. Discounts allowed by trade payables amounted to $1,350 and allowed to  trade receivables amounted $1,840.  

b. The financial year goods returned by trade receivables amounted to  $1,600 and goods returned to trade payables amounted to $6,900. 

c. The financial year a trade debt of $1,200 owed by Lottie Graham was  off-set against the $2,000 owing to the same Lottie Graham a trade  creditor. 

d. A customer, Janet Hutton bought goods using a debit card. She returned 3 goods amounting to $700 and was repaid from the Debit Card takings before applying the commission (see note No. 7). 

e. John Phelps puts a further $135,000 into the bank account of the business  to shore up working capital. This is not yet reflected in the bank balance. 

4. The closing trade receivables include $750 in respect of a bad debt that should  be written off. 

5. The computer equipment was purchased on April 9, 2020. Depreciation should  be calculated on the computer equipment on the straight line basis at a rate of  20% per annum on cost. It is the policy of the business to charge a full month’s  depreciation in the month of acquisition or disposal. 

6. On April 1, 2020 John Phelps’ received a loan of $75,000 from his mother.  Interest should be charged on the reducing balance at a rate of 10% per annum.  The first interest payment is to be made on March 31, 2021. The principal is  being paid in equal instalments of $25,000 commencing on September 30,  2020, September 30, 2021 and September 30, 2022. Interest on loan was  outstanding at December 31, 2020. 

7. For some of the sales debit cards are accepted. John Phelps pays 2.5% debit  card commission on gross debit card sales.  

8. The balances at the end of each year are as follows: December 31, 2019 December 31, 2020 $ $ Inventory 41,000 48,500 Trade receivables 29,300 35,750 Prepaid rent 500 600 Fixtures (net) 20,000 19,000 Trade payables 19,500 19,000 Debit card receivables 1,325 750 Required: 

c. Prepare the Trade Payables Control Accounts.  (7 marks)