QUESTION FOUR

Mega Store (Pty) Ltd has a wholesale section that conducts some of their business on credit. Transactions are first recorded in specialized journals and the general journal on a real time basis. The accounting department uses clerks to post transactions recorded in the journals into Debtors accounts and Creditors accounts in the subsidiary ledgers on a daily basis. Transactions from the journals are posted into the Debtors control account and the Creditors control account in the general ledger on a monthly basis. The following information was extracted from the accounting records of Mega Store (Pty) Ltd on 31 December 2021.

R

Sales journal Purchase journal Sales Return Journal Purchases Returns journal Cash Receipts Journal: Debtors control column Settlement discount granted column Sales column Cash payments journal: Purchases column Debtors control column Creditors control column Settlement discount received column General Journal: (sundry entries) Debtors control: Debits: Sale of Vehicle Credits: Credit losses Creditors control: Debits: Credits: Purchased Equipment General Ledger: Balances at 1 January 2021- Debtors control account: debit balance : credit balance Creditors control account: credit balance (only)

78 102 50 652 8 640 4 356 85 680 15 120 149 778 88 506 10 638 81 720 11 934 12 186 1 860 Nil 9 594 121 140 2 736 82 116

Additional Information

The following has not been taken into account in arriving at the figures above:

1.The amount of R5 202 owing by a debtor, F Skelm, must be written off as irrecoverable.

2.The allowances for credit losses must be increased by R2 250

3.On 10 December 2021, goods to the value of R6 300 was purchased on credit, but was incorrectly recorded in the sales journal.

4.The credit balances in the debtors ledger at 1 January 2021 must be transferred to the creditors control account.

Required :

Prepare the following as they would appear in the general ledger of Mega Store (Pty) Ltd for the year ended 31 December 2021:

4.1 Debtors control account

4.2 Creditors control account

NB : - The accounts must be properly balanced or closed off.

- Each entry in the ledger account must reflect the contra account

- Folio numbers may be omitted

- Record the dates for the transactions.

- Marks will be deducted for recording entries that are unrelated to the control accounts.

Neil Brown is a businessman who buys a package of goods and wholesales the package for cash. His business is registered as a VAT Vendor. During March 2022 he purchased for cash a package of goods for R28 000 (exclusive of 15% VAT). Neil uses a mark-up of 30% on the cost price and sold the package for R41 860 (inclusive of VAT). Neil uses the perpetual inventory system to keep records of his trading activities.

Required:

Record general journal entries for the purchase and sale of the package of goods. You do not have to record the dates but must include a brief narration appropriate for both the purchase and sale of the goods above.

Mary has a general ledger dealer business and uses the periodic inventory system to keep records of buying and selling goods. The following information was extracted from the accounting records for the financial year ended 30 June 2020.

List of selected accounts at 30 June 2021	R
Trading inventory : 1 July 2021	225 000
Purchases	916 400
Sales	1 668 800
Purchase returns	17 300
Sales returns	20 700
Settlement discounts received	32 600
Settlement discounts granted	17 900
Transport inwards (from suppliers)	45 200
Transport outwards (to customers)	23 100

Additional information

1.Trading inventory at 30 June 2021 was taken and valued at R203 400.

2. Neil took inventory worth R18 100 for his personal use. This has not been recorded in the above accounting records.

3. Insurance on goods transported from suppliers for R7400 is also not yet included in the above information.

Required

Prepare only the trading section of the Statement of profit or loss and other comprehensive income for Mary's General Dealers for the year ended 30 June 2021.