Theory question 102
Control AccountsSection B (answer three questions only from this section)
2. The following balances were extracted from the books of Ima Enterprises on 31st December, 1995.
Sales ledger, debit balance, 1/1/95: N98,260
Sales ledger, credit balance, 1/1/95: N2,370
Bought ledger, credit balance, 1/1/95: N72,190
Bought ledger, debit balance, 1/1/95: N4,210
Credit purchases: N513,620
Credit Sales: N781,540
Accounts settled by contra: N6,220
Bills dishonoured: N7,500
Bad debts written off: N5,260
Bills of exchange drawn on customers: N34,730
Returns inward: N7,450
Returns outward: N8,920
Cash received from debtors: N689,230
Cash paid to suppliers: N495,140
Discounts received: N19,320
Discounts allowed: N24,750
Cash refunded to customers: N1,270
Sales ledger credit balance, 31/12/95: N2,010
Bought ledger debit balance, 31/12/95: N3,340
You are required to prepare: (a) Sales Ledger Control Account and (b) Purchases Ledger Control Account.
Show the model answer
(a) Sales ledger control account
Dr: balance b/f 98,260; credit sales 781,540; bills dishonoured 7,500; cash refunded 1,270; balance c/d (credit balances) 2,010 = 890,580.
Cr: balance b/f (credit balances) 2,370; contra 6,220; bad debts 5,260; bills receivable 34,730; returns inwards 7,450; cash 689,230; discounts allowed 24,750; balance c/d (debit) 120,570 = 890,580.
(b) Purchases ledger control account
Dr: balance b/f (debit balances) 4,210; contra 6,220; returns outwards 8,920; cash 495,140; discounts received 19,320; balance c/d (credit) 55,340 = 589,150.
Cr: balance b/f 72,190; credit purchases 513,620; balance c/d (debit balances) 3,340 = 589,150.
Show opening and closing balances on both sides when the ledger has some balances the 'wrong' way round.