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QUESTION 3 (20 Marks) Baines Superstore proves the accuracy of its sales and purchase ledgers by preparing monthly control accounts. On I May 2012 the
QUESTION 3 (20 Marks) Baines Superstore proves the accuracy of its sales and purchase ledgers by preparing monthly control accounts. On I May 2012 the following balances existed i record: the business' accounting Sales ledger control account (Dr) 188.360 (Cr) 2.140 (Dr) Purchase ledger control account 120 (Cr) 89.410 The foll ow ing are the totals of transactions which took place during May 2012. as extracted from the company's records. Credit sales 101.260 Credit purchases Sales returns/Returns inwards Purchases returns/Returns outwards 68.420 9.160 4.280 Cash received from customers 91.270 71.840 Cash paid to suppliers Cash discounts allowed Cash discounts received 1.430 880 Irrecoverable debts written off 460 480 Contra settlements At 31 May 2012 the balances on the customers and supplier personal accounts were extracted and totalled as follow s: Sales ledger Purchase ledger (Dr) NS90 An initial attempt to balance the two ledgers showed that neither of them agreed with their control accounts. The differences were found to be due to the following: (Cr) N$2.680 A credit balance of NS680 had been omitted when listing the sales ledger personal () accounts. A contra settlement of NS500 had not been included in the totals of transactions (ii) prepared for the control accounts. A new employee had mistakenly entered five sales invoices into the purchases day book as if they had been purchase invoices and entered the amounts to new supplier personal accounts. The total of these invoices was NS1.360. A NS20 cash refund to a customer was made. and has not been included in the (iii) (iv) summary of transactions given above. The NS20 was entered to the customer's personal account as if it had been a cash receipt from the customer, and this resulted in a N$40 credit baance on the account, which was still outstanding at 31 May 2012 When these errors had been corrected both control accounts agreed with the personal accounts Calculate the following .1 Closing debit balance on the sales ledger control account (10 marks) Closing credit balance on the purchase ledger control account (10 marks) 3.2 QUESTION 3 (20 Marks) Baines Superstore proves the accuracy of its sales and purchase ledgers by preparing monthly control accounts. On I May 2012 the following balances existed i record: the business' accounting Sales ledger control account (Dr) 188.360 (Cr) 2.140 (Dr) Purchase ledger control account 120 (Cr) 89.410 The foll ow ing are the totals of transactions which took place during May 2012. as extracted from the company's records. Credit sales 101.260 Credit purchases Sales returns/Returns inwards Purchases returns/Returns outwards 68.420 9.160 4.280 Cash received from customers 91.270 71.840 Cash paid to suppliers Cash discounts allowed Cash discounts received 1.430 880 Irrecoverable debts written off 460 480 Contra settlements At 31 May 2012 the balances on the customers and supplier personal accounts were extracted and totalled as follow s: Sales ledger Purchase ledger (Dr) NS90 An initial attempt to balance the two ledgers showed that neither of them agreed with their control accounts. The differences were found to be due to the following: (Cr) N$2.680 A credit balance of NS680 had been omitted when listing the sales ledger personal () accounts. A contra settlement of NS500 had not been included in the totals of transactions (ii) prepared for the control accounts. A new employee had mistakenly entered five sales invoices into the purchases day book as if they had been purchase invoices and entered the amounts to new supplier personal accounts. The total of these invoices was NS1.360. A NS20 cash refund to a customer was made. and has not been included in the (iii) (iv) summary of transactions given above. The NS20 was entered to the customer's personal account as if it had been a cash receipt from the customer, and this resulted in a N$40 credit baance on the account, which was still outstanding at 31 May 2012 When these errors had been corrected both control accounts agreed with the personal accounts Calculate the following .1 Closing debit balance on the sales ledger control account (10 marks) Closing credit balance on the purchase ledger control account (10 marks) 3.2
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