The following transaction relate to the month of June 2020 and is taken from the books of Magnificent Ltd. Balances on customers' accounts, June 1: Dr. 83,160 Cr. 1,200 Balances on suppliers' accounts, June 1: 54,040 Sales (including cash sales of $20,000) 113,900 Credit purchases 52,760 Set-off between customers' and suppliers' accounts 1,500 Cash purchases 13,000 Payment to credit suppliers 50,520 Discounts received 1,180 Provision for doubtful debts (June 30) 1,900 Returns to credit suppliers 1,240 Interest on overdue receiveables 90 Returns from credit customers 2,440 Cash and cheques received from credit customers (in full settlement of balances amounting to $83,300) 82,000 Bad debts written off 900 Customer's cheque dishonoured 250 Debit balances on suppliers' accounts, June 30 460 Credit balances on customers' accounts, June 30 240 a) Prepare the following: i. The sales ledger control account ii. The purchases ledger control account b) State TWO reasons why a firm would maintain control accounts
The following transaction relate to the month of June 2020 and is taken from the books of Magnificent Ltd.
Balances on customers' accounts, June 1:
Dr. 83,160
Cr. 1,200
Balances on suppliers' accounts, June 1: 54,040
Sales (including cash sales of $20,000) 113,900
Credit purchases 52,760
Set-off between customers' and suppliers' accounts 1,500
Cash purchases 13,000 Payment to credit suppliers 50,520
Discounts received 1,180
Provision for doubtful debts (June 30) 1,900
Returns to credit suppliers 1,240
Interest on overdue receiveables 90
Returns from credit customers 2,440
Cash and cheques received from credit customers (in full settlement of balances amounting to $83,300) 82,000
Customer's cheque dishonoured 250
Debit balances on suppliers' accounts, June 30 460
Credit balances on customers' accounts, June 30 240
a) Prepare the following:
i. The sales ledger control account
ii. The purchases ledger control account
b) State TWO reasons why a firm would maintain control accounts
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