Q2

Coffee Champions uses special journals and subsidiary ledgers in their accounting system. At 1 July, the balance in the Accounts Receivable Control account was $20,000, and balance in the Accounts Payable Control account was $25,500. The July transactions recorded in the special journals are summarised below.

Sales journal Total sales $14,300

Purchases journal Total purchases $5,600

Cash receipts journal Accounts Receivable column total $9,650

Cash payments journal Accounts Payable column total $12,300

Required:

a) Calculate the balance of the Accounts Receivable Control account as at 31 of July 2021. (3.5 marks)

b) Calculate the balance of the Accounts Payable Control account as at 31 of July 2021. (3.5 marks)

c) Discuss the importance of preparing a schedule of accounts receivable. (2 marks)