Theory question 106
Control AccountsThe following information were extracted from the books of Pletora Ltd for the month of June 2023.
Purchases ledger balance b/f: GH¢61,345
Sales ledger balance b/f: GH¢100,220
Credit sales: GH¢920,580
Credit purchases: GH¢817,500
Returns outwards: GH¢18,780
Returns inwards: GH¢15,500
Cheques paid to suppliers: GH¢815,350
Cash received from customers: GH¢915,000
Discount allowed: GH¢30,200
Discount received: GH¢15,250
Bad debts written-off: GH¢850
Credit notes issued: GH¢2,500
Set-off: GH¢10,280
Sales ledger balance (Dr): GH¢46,470
Purchases ledger balance (Cr): GH¢19,185
You are required to prepare: (a) Sales Ledger Control Account; (b) Purchases Ledger Control Account
Show the model answer
(a) Sales Ledger Control Account (GH¢):
Dr: Balance b/f 100,220; Credit sales 920,580 = 1,020,800
Cr: Returns inwards 15,500; Cash received 915,000; Discount allowed 30,200; Bad debts 850; Credit notes issued 2,500; Set-off (purchases ledger) 10,280; Balance c/d 46,470 = 1,020,800
(b) Purchases Ledger Control Account (GH¢):
Dr: Returns outwards 18,780; Cheques paid 815,350; Discount received 15,250; Set-off (sales ledger) 10,280; Balance c/d 19,185 = 878,845
Cr: Balance b/f 61,345; Credit purchases 817,500 = 878,845
The closing balances agree with the ledger balances given (46,470 Dr and 19,185 Cr).
Debtors' increases go on the debit side of the sales ledger control; the set-off appears in both accounts.