Control Accounts provide J-Quan Ltd with useful information on sales and purchases. At the end of January 2021, the following balances were extracted from the company’s ledgers: Details/Accounts $ January 1, 2021:   Purchases ledger balance b/d (dr) 25,000 Sales ledger balance b/d (cr) 18,700 Sales ledger balance b/d (dr) 51,400 Purchases ledger balance b/d (cr) 37,400 January 31, 2021:   Bad debts written off 30,000 Discount received 4,600 Set off between sales and purchases ledgers 4,000 Credit sales for the month 37,800 Cheques paid to supplier’s 31,000 Interest on overdue customers’ accounts 3,500 Cash received from debtors 29,000 Dishonoured suppliers’ cheques 1,500 Discount allowed 45,000 Cash sales for the month 12,000 Credit purchases for the month 24,000 Refunds to credit customers 2,800 Return inwards 4,200 Cash purchases 7,500 Cheques received from accounts receivable 33,000 Return outwards 2,400 Cash paid to creditors 8,900 Interest on overdue suppliers’ accounts. 800 Dishonoured customers’ cheques 2,000 Bad debt recovery 3,300   Required (a)   Write up the company’s Sales Ledger Control accounts for the month of January 2021.      (b)   Write up the company Purchases Ledger Control account for the month of January 2021.      (c)   Identify TWO (2) reasons why a company would need to do Control Accounts

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Control Accounts provide J-Quan Ltd with useful information on sales and purchases.

At the end of January 2021, the following balances were extracted from the company’s ledgers:

Details/Accounts

$

January 1, 2021:

 

Purchases ledger balance b/d (dr)

25,000

Sales ledger balance b/d (cr)

18,700

Sales ledger balance b/d (dr)

51,400

Purchases ledger balance b/d (cr)

37,400

January 31, 2021:

 

Bad debts written off

30,000

Discount received

4,600

Set off between sales and purchases ledgers

4,000

Credit sales for the month

37,800

Cheques paid to supplier’s

31,000

Interest on overdue customers’ accounts

3,500

Cash received from debtors

29,000

Dishonoured suppliers’ cheques

1,500

Discount allowed

45,000

Cash sales for the month

12,000

Credit purchases for the month

24,000

Refunds to credit customers

2,800

Return inwards

4,200

Cash purchases

7,500

Cheques received from accounts receivable

33,000

Return outwards

2,400

Cash paid to creditors

8,900

Interest on overdue suppliers’ accounts.

800

Dishonoured customers’ cheques

2,000

Bad debt recovery

3,300

 

Required

(a)   Write up the company’s Sales Ledger Control accounts for the month of January 2021.     

(b)   Write up the company Purchases Ledger Control account for the month of January 2021.     

(c)   Identify TWO (2) reasons why a company would need to do Control Accounts

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