The following balances were extracted from the books of Shilongo Traders on 1 January

2020.

Dr Cr

Purchases Ledger 1 912 83 025

Sales Ledger 130 905 1 940

In the month of January 2020, the following transactions were made:

Debit balance on Sales Ledger transferred to Purchases Ledger 4 956

Debtor's cheque dishonoured 1 908

Sales on credit 133 650

Credit purchases 96 645

Returns outwards to credit suppliers 3 795

Returns inwards from credit customers 1 590

Cash sales 19 005

Cash purchases 10 913

Discount allowed 1 305

Discount received 1 600

Allowance for credit losses 474

Payments to credit suppliers 81 540

Receipts from credit customers 127 385

Refund to customer for overpayment 600

At 1 February 2020, the following information was available:

Purchases Ledger debit balances 480

Sales Ledger credit balances 787

Required:

(a) Prepare the Purchases Ledger Control Account for the month of January 2020

[13 marks]

(b) Sales Ledger Control Account for the month of January 2020. [15 marks]

(c) Explain six advantages of using control accounts. [12 marks]

Total: 50 Marks