YEAR1 1. The balance on trade receivables at the year-end is 110,000. 2. Two of the balances in the sales ledger must be written off. One is 4,500, the other is 5,500. 3. The company is to provide 5 per cent for an allowance for irrecoverable debts and 5 per cent for an allowance for discounts. YEAR2 1. The sales in the year were f10,000 lower than the cash received in the year (consider the impact of this on the closing balance). (Hint: they received more cash from customers than the balance of the Sales a/c. How do you adjust the Trade receivables a/c ? 2. One of the debts that had been written off last year (5,500) is now recoverable. 3. At the end of this year the auditor has identified 500 of the sales ledger balances as irrecoverable debts. These should be written off. 4. The allowance for discounts should be increased to 10 per cent. 5. The allowance for irrecoverable debts should be adjusted to 2 per cent. Required Show the transactions in the sales ledger and the general ledger accounts and the extract entries from the statement of profit or loss and statement of financial position for the two years. (Suggestion: use the provided Excel spreadsheet for this exercise.) YEAR1 1. The balance on trade receivables at the year-end is 110,000. 2. Two of the balances in the sales ledger must be written off. One is 4,500, the other is 5,500. 3. The company is to provide 5 per cent for an allowance for irrecoverable debts and 5 per cent for an allowance for discounts. YEAR2 1. The sales in the year were f10,000 lower than the cash received in the year (consider the impact of this on the closing balance). (Hint: they received more cash from customers than the balance of the Sales a/c. How do you adjust the Trade receivables a/c ? 2. One of the debts that had been written off last year (5,500) is now recoverable. 3. At the end of this year the auditor has identified 500 of the sales ledger balances as irrecoverable debts. These should be written off. 4. The allowance for discounts should be increased to 10 per cent. 5. The allowance for irrecoverable debts should be adjusted to 2 per cent. Required Show the transactions in the sales ledger and the general ledger accounts and the extract entries from the statement of profit or loss and statement of financial position for the two years. (Suggestion: use the provided Excel spreadsheet for this exercise.)