Question
The Right Place Enterprise is a liquor store in the Caribbean. It sells on credit and purchases goods on credit. The following information was taken
The Right Place Enterprise is a liquor store in the Caribbean. It sells on credit and purchases goods on credit. The following information was taken from its books at the end of 2021 June:
$ Receivables balance at 2021 June 01 $83, 490
Payables balance at 2021 June 01 $52, 800
Cash and cheques receivables 270 000
Cash and cheques payables 170 000
Discounts allowed 6 350
Discounts received 7 700
Provision for bad debts 5 000
Bad debts written off 440
Cash sales 10 000
Credit sales 258 350
Cash purchases 6 000
Credit purchases 154 000
Returns inwards 1 280
Returns outwards 1 600
Balance in receivables ledger transferred to payables ledger 200 Credit balance on receivables ledger 1 000
A. Prepare the Sales Ledger Control Account. (9 marks)
B. Prepare the Purchases Ledger Control Account. (8 marks)
C. What are THREE (3) uses of control accounts?
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