QUESTION TWO

The following balances and transactions were extracted from the books of BathAir company Limited for the year ended 31stAugust, 2021.

August, 2021:Dr. balances in the accounts receivable ledger12,890

Dr. balances in the accounts payable ledger 2,180

Cr. Balances in the accounts receivable ledger 1,640

Cr balances in the accounts payable ledger47,500

Business transactions year to August, 2021 were as follows:

Credit sales87,000

Cash sales12,000

Credit purchases96,000

Cash purchases22,000

Returns inwards 6,460

Returns outwards 5,520

Discount allowed 9,200

Discount received 8,500

Cash received from credit customers45,000

Cheques paid to suppliers57,100

Cheques received from debtors35,690

Cash paid to creditors37,900

Provision for doubtful debts20,000

Bills payables18,900

Bills receivables17,700

Refund to credit customers for overpayments10,000

Bad debts written off 6,000

Cheques from customers dishonoured18,000

Cash refund to customers for damaged goods 9,000

Interest charged to customers for overdue debts 4,100

Credit balances in the receivable ledger 3,500

Debit balances in the payable ledger 2,900

Debit balances in the payable ledger set-off against credit balances in

receivable ledger 15,000

you are to draft the:

i). Payables totals account(8Marks)

ii). Receivables totals account(8Marks)

iii). State reasons for the accounts drafted