Raw $($Pty$)$ Ltd$,$ "Raw", is a company that sells organic nuts to the public. The company

is a registered VAT vendor and has a $30$ June financial year$-$end.

The following transactions occurred during the year ended $30$ June $2024$ and have

not been recorded yet: When posting the totals from the sales journal to the general

ledger at the end of August $2023,$ the sales column was posted as R$258000$ instead

of R$285000.$ All amounts, including VAT.

Total credit sales for the year amounted to R$1450000($including VAT$).$

Total cash sales for the year amounted to R$987000($including VAT$).$

On $1$ August $2024$ a trade receivable, Nature Den Ltd paid their debt of R$7450$

$($including VAT$).$ This amount has been written off as irrecoverable in the year

The one trade receivable, White Cat Ltd$,$ was declared insolvent in $2024.$ The

total debt owed by White Cat Ltd amounted to R$152000($including VAT$).$ White

Cat Ltd$\text{'}$s lawyers confirmed that White Cat Ltd$\text{'}$s creditors would receive $55$c for

each Rand owed to the business. Raw received the settlement in June $2024$

and decided to write the remainder of White Cat Ltd$.\text{'}$s debt off as irrecoverable.

During the year, Raw received R$2000000($including VAT$)$ from trade

receivables towards their accounts.

On $30$ June $2024,$ a trade receivable amounting to R$8750($including VAT$)$ was

considered to be irrecoverable, and Raw decided to write the debt off as

irrecoverable.

Raw reliably estimated that it was unlikely that $5\%$ of outstanding trade

receivables on $30$ June $2024$ would be collected.

Additional information:

Trade receivables has an opening balance of R$1258000$ on $1$ July $2023.$

Allowance for doubtful debts has an opening balance of R$50320$ on $1$ July $2023.$

REQUIRED:

ANNEXURE I: FORMATIVE ASSESSMENT $2$

$3\mathrm{.}1$ Prepare the general journal entries to account for transaction $3$ for the year

ended $30$ June $2024$ of Raw $($Pty$)$ Ltd$.$

Remember to show your workings.

Round up to the nearest rand where applicable.

$3\mathrm{.}2$ Prepare the Trade Receivables general ledger account to account for the

transactions for the year ended $30$ June $2024$ of Raw $($Pty$)$ Ltd$.$

Dates are not required.

The account must be closed$-$off at the end of the month.

Remember to show your workings.

$3\mathrm{.}3$ Explain two advantages of allowing customers to purchase on credit. Give a

brief explanation of each advantage.