Question 6 - A&L Software Suppliers

Use the information provided in appendix 'Case Study - A&L Software Suppliers' to undertake the following tasks.

Case Study - A&L Software Suppliers

Use the data below for A & L Software Suppliers P/L. The business receives and allows a discount of 2.5% if the account is paid and received within 7 days and charges interest of 1% on overdue accounts.Suppliers charge the business 2% interest on accounts not paid within 30 days.

Note: Peter's Computer Store (Accounts Receivable) owes the business $990 from the previous month. This debt and the interest is written off at the end of the month, notification was received that Peter's computer store has been declared bankrupt.

P. Narsi & Bros supply and buy from the business, opening balance of P. Narsi & Bros (Accounts Receivable) is $ 1870 and opening balance of P. Narsi & Bros (Accounts Payable) is $ 2200. A contra entry has been recorded to net the debt off.No interest is charged on the difference.

Accounts Payable, Theo's Software P/L has a balance of $1650 from the previous month. Interest is charged by suppliers at 2% if account is not paid in 30 days.

1. Post the journals to General ledger (Accounts Receivable and Accounts Payable control ledgers).
2. Post the journals to Subsidiary Accounts Receivable and Subsidiary Accounts Payable ledgers.
3. Extract a schedule of Accounts Receivable and Accounts Payable balances.
4. Prepare statements for all customers that include an aged analysis of balance owing.
5. Reconcile statement received from Accounts Payable, Theo's Software P/L for the month with the business records and prepare a reconciliation statement.
6. What procedures should the business follow to recover the outstanding debts of Accounts Receivables?