Question
The books of Sunshine Ltd include 3 ledgers comprising the nominal ledger, receivables ledger and payables ledger. The nominal ledger contains receivables ledger and payables
The books of Sunshine Ltd include 3 ledgers comprising the nominal ledger, receivables ledger and payables ledger. The nominal ledger contains receivables ledger and payables ledger control accounts as part of the double entry system.
The following information relates to the accounting month ended 31.1.21.
Receivables ledger control account balance on 1.1.21 35,650
Payables ledger control account balance on 1.1.21 31,520
Cheques received from customers 26,420
Cheques paid to creditors 20,530
Sales 29,555
Purchases 25,650
Returns outwards 1,650
Discount received 145
Discount allowed 650
Bad debts 985
Cash paid to a customer in respect of an overpayment 125
Bad debt recovered (included in receipts above) 100
Total of receivables balances per the receivables ledger on 31.1.21 37,282
Total of payables balances per the payables ledger on 31.1.21 34,893
- You are required to show the receivables and payables ledger control accounts
After the preparation of the above control accounts the following errors were discovered.
1 The total of the returns outwards book had been overcast by 100.
2 Discount received of 18 was omitted from a supplier's personal account.
3 A cheque received from a customer for 455 was entered in the cash receipts book as 445.
4 Interest of 20 charged by a supplier on an overdue debt had been entered in the supplier's personal account, but no further entries had been made.
5 A credit balance on a customer's account of 36 was listed as a debit balance.
6 A cheque payment to a supplier of 1,564 had been posted to the supplier's account as 1,654.
7 Discount of 24 disallowed by a creditor had been treated as discount received in the books.
8 Cash sales of 132 plus VAT @ 25% had been included in the sales day book at their VAT inclusive amount.
You are required to prepare a statement showing the amended balances on the payables and receivables control accounts and to reconcile these balances with the total of balances extracted from the receivables and payables ledger.
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