QUESTION $3(25$ Marks$)$

BSG Traders is a company that manufactures handmade leather shoes. The company

accountant, Miss A Ntintelo, is in the process of preparing the Debtors$$ Reconciliation

for the month of March $2024.$

The following information is available to her:

R

Trade receivables $(29/02/24)$

$($The balance is a net $5\%$ allowance for doubtful debts$)$

$60652$

Total column of the sales journal $32804$

Trade receivable column in the Cash Receipts Journal $37224$

Credit sales returns for the month $5310$

Closing balance on the Debtor$$s List $44132$

$$ In early March, a decision was taken to write off a debtor, A$.$ Dereck, as bad. A$.$

Dereck, a known gambler who went missing after a high$-$stakes poker game, had

purchased goods to the value of R$4180$ in the previous month.

$$ On the $29$ of February, another debtor, B$.$ Bauti, was declared insolvent. Reliable

estimates from the executor indicate that creditors will able to recover $16$c in the

rand. The outstanding balance on his account was R$6607.$

$$ On the last day of the month, a cheque was received from A$.$ Dereck in full payment of his outstanding balance. As it turned out, he had been in Spain betting

on football.

When comparing the Debtor$$s Ledger with the General Ledger, Miss Ntintelo identified

the following errors;

$$ A credit sale to a customer, G$.$ Brians, was incorrectly accounted for in the company books. the sale was for R$9322,$ and Mr Brians was offered a $10\%$ trade

discount for his bulk purchase. The sale was recorded as follows in the General

Ledger:

Dr Trade receivables R$9322$

Cr Sales R$9322$

The transaction was correctly dealt with in the Debtor$$s Ledger.

$7$ HFAC$130-1-$Jan$-$Jun$2024-$FA$2-$GC$-$V$2-07022024$

ABC maintains their allowance for doubtful debts at $5\%$ of the outstanding trade

receivables balance at month end.

Required;

a$)$ Prepare the trade receivable account in the General Ledger $(9$ marks$)$

b$)$ Prepare the account of A$.$ Dereck in the debtors$$ Ledger $(6$ marks$)$

c$)$ Prepare ALL the entries in the general journal with regard to Bad debts and allowance for doubtful debts. $(10$ marks