Homework answers / question archive / Dean Stone operates a business, Stone Wear Style, for which the accounting records include control accounts for debtors and a separate control account for creditors

Dean Stone operates a business, Stone Wear Style, for which the accounting records include control accounts for debtors and a separate control account for creditors

Accounting

Share With

Dean Stone operates a business, Stone Wear Style, for which the accounting records include control accounts for debtors and a separate control account for creditors. Dean just promoted Charlie Bait to maintain records of the control accounts and to reconcile the lists and the control accounts balances. The following information relates to March 2019: DR Debtors control a/c CR 201 R 201 R 9 Balance (correct) b/d 31 340 Sales returns - credit 4 440 1.3 Bank (debtors column) 90 990 31.3 Bank debtor 850 31.3 Discounts granted 1 370 refunds 67 602 Credit sales 96 330 Credit purchases 2016 Drawings 300 Cash purchases 550 Purchases returns 4 262 Discounts received 7 960 credit Bank-creditors 141 174 column Balance cld 224 592 224 592 1.4 Balance b/d 141 174 Additional information: 1.1 At 1 March 2019, the balance of the creditors control account was R16 680. 1.2 There are errors in the above debtors control account that need to be corrected. There are items recorded that should not be reflected in the debtors control account. Some items are also on the wrong side of the account. 1.3 The total of the list of debtors balances at 31 March 2019 was R32 120. 1.4 An amount of R230 written-off as credit losses, has erroneously been added
to the credit sales amount of R96 330. This entry has been posted correctly to the personal account of the debtor in the debtor's subsidiary ledger. 1.5 The sales journal was over-cast by R840. 1.6 A credit sale of R340 was not posted to the personal account of the debtor in the debtors ledger account. The amount has been posted correctly to the sales account and the debtors control account in the general ledger. 1.7 A credit note for R140 was recorded correctly in the sales returns journal but posted to the wrong side of the debtor's personal account in the debtors subsidiary ledger. 1.8 The debtors column in the cash receipts journal includes an amount of R390 being a settlement discount received from a creditor. 1.9 The purchase journal was under-cast by R1 436. 1.10 The R850 was refunded to a debtor because their account was overpaid. Required: 3.1 Prepare a properly balanced debtors control account, corrected for errors that exist in the given account, and a properly balanced creditors control account for March 2019. NB. The additional information must also be taken in account. (16) (4) 3.2 Prepare the debtors reconciliation statement for March 2019.