Theory question 106
Control AccountsThe following information were extracted from the ledgers of Shehu Ltd, for the month of January, 1986.
1/1/86 Debit balance in the Sales ledger ₦4,002
Debit balance in the Bought ledger ₦78
31/1/86 Sales of Goods ₦10,000
Returns Inwards ₦800
Bad debts written off ₦120
Cash received ₦4,990
Discount allowed ₦110
Purchases ₦6,780
Cash paid ₦3,240
Returns Outwards ₦200
Customers cheques dishonoured ₦400
Discount received ₦220
Interest charged to customers on overdue accounts ₦20
Prepare for the month of January, 1986 (a) Sales Ledger Control Account (b) Purchases Ledger Control Account
Show the model answer
(a) Sales Ledger Control Account
Dr: balance b/d 4,002; sales 10,000; dishonoured cheques 400; interest charged 20; total 14,422
Cr: returns inwards 800; bad debts 120; cash 4,990; discount allowed 110; balance c/d 8,402; total 14,422
Balance b/d ₦8,402 (debit)
(b) Purchases Ledger Control Account
Dr: balance b/d (debit balance) 78; cash 3,240; returns outwards 200; discount received 220; balance c/d 3,042; total 6,780
Cr: purchases 6,780; total 6,780
Balance b/d ₦3,042 (credit)
A debit balance in the bought ledger is brought down on the debit side of the purchases ledger control account.