QUESTION THREE You have been given the following balances from the books of Shawama General Dealers...

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QUESTION THREE You have been given the following balances from the books of Shawama General Dealers for the year ended 31 May 2017. Sales Purchases Cash received from customers Cash paid to suppliers K'000 260 185 180 150 Discount received Discount allowed Returns outward Returns inward Irrecoverable Debt Customer's cheque dishonored Cash refund to customer 1.5 Cash in respect of debit balances in payables ledger 5.5 12 18 28374546 3 On 1 June 2016, the receivables ledger balances were K14,800 debit and K2,600 credit, and the payables ledger balances on the same date were K27,000 credit and K5,900debit. On 31 May 2017, there were no credit balances in the receivables ledger except those outstanding on 1 June 2016 and no debit balances on the payables ledger. Required: (a) Explain THREE purposes of control accounts. (3 marks) (b) Write up the receivables Control Account and the payables Control Account, bringing down the balances on 1 June 2017. (13 marks) (c) Explain the difference between (i) Accrued expenses and prepaid expenses (ii) Dishonoured cheque and irrecoverable debts (2 Marks) (2 Marks) (TOTAL: 20 MARKS) QUESTION THREE You have been given the following balances from the books of Shawama General Dealers for the year ended 31 May 2017. Sales Purchases Cash received from customers Cash paid to suppliers K'000 260 185 180 150 Discount received Discount allowed Returns outward Returns inward Irrecoverable Debt Customer's cheque dishonored Cash refund to customer 1.5 Cash in respect of debit balances in payables ledger 5.5 12 18 28374546 3 On 1 June 2016, the receivables ledger balances were K14,800 debit and K2,600 credit, and the payables ledger balances on the same date were K27,000 credit and K5,900debit. On 31 May 2017, there were no credit balances in the receivables ledger except those outstanding on 1 June 2016 and no debit balances on the payables ledger. Required: (a) Explain THREE purposes of control accounts. (3 marks) (b) Write up the receivables Control Account and the payables Control Account, bringing down the balances on 1 June 2017. (13 marks) (c) Explain the difference between (i) Accrued expenses and prepaid expenses (ii) Dishonoured cheque and irrecoverable debts (2 Marks) (2 Marks) (TOTAL: 20 MARKS)