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ANSWER To Accounting Question No. CO 2 On Control Accounts
(a) Purchases & Sales Ledger Control Accounts:
Purchases Ledger Control Account
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Debit($)
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Credit($)
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2008
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2008
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July 1 Balance b/d
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186
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July 1 Balance b/d
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17,960
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July 31
Returns outwards
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1,024
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July 31
Credit Purchases
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49,216
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Discount received
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1,045
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Balanced c/d
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212
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Payment to supplier
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47,310
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Contra
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450
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Balance c/d
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17,373
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67,388
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67,388
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Aug 1 Balance b/d
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212
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Aug 1 Balance b/d
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17,373
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Sales Ledger Control Account
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Debit($)
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Credit($)
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2008
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2008
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July 1 Balance b/d
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28,240
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July 1 Balance b/d
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235
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July 31
Credit Sales
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1,024
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July 31
Bad debts
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190
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Dishonored cheque
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63,140
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Returns inwards
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1,642
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Legal Fee
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150
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Cash received
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67,930
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Balance c/d
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287
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Discount allowed
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1,820
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Contra
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450
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Balance c/d
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19,865
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92,132
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92,132
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Aug 1 Balance b/d
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19,865
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Aug 1 Balance b/d
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287
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(b) Balance Sheet Of Jim at 31 st July 2008
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($)
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($)
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Current Assets
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Debtors ( Working No 1)
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19,578
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Less: Provisions for bad & doubtful debts
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320
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19,258
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Current Liabilities
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Creditors(Working No.2)
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17,161
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Workings:
1. Debtors balance =$19,865-$287= $19,578
2. Creditors balance=$17,373-$212= $17,161
(c) By keeping the Sales Ledger Control into six parts according to sales areas and to keep Control Account for each part, Jim would then know the total sales and debtors balances for each sales area during an accounting period.
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