The following information has been obtained from the books of Tom Limited for the year ended...

 

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The following information has been obtained from the books of Tom Limited for the year ended 31 December 2019: Opening payables control account balance at 1 January 2019 Cheque payments to payables 237,200 187,130 32,100 Discounts received during the year Contras 9,124 Credit purchases during the year 156,242 48,770 Credit notes received during the year On extracting a list of balances from the payables ledger (purchases ledger), the accountant found that they totalled £81,804. On further investigation the following errors were discovered: 1. An invoice for £4,000 in respect of purchases from Midge Limited was not recorded in the purchases day book. 4 2. Purchases from Mr Dimico of £2,000 have been wrongly entered in Mrs Barton's individual account in the receivables ledger. 3. The purchases day book contained a transcription error whereby £25,340 was brought forward onto the following page as £43,340. 4 4. The discounts received column of the cash payments book has been overcast by £2,100. 5. Invoices amounting to £18,120 have been included in the control account but not in the purchases ledger. 6. In preparing the list of balances from the purchases ledger, credit balances of £1,268 were incorrectly analysed as debit balances.< 7. A contra of £3,940 has been posted to the control accounts without updating the ledgers. 4 8. Discounts received from Shirley Limited of £30 were recorded as £102 in the cash book and omitted entirely from the postings to the purchases ledger. Requirement (a) Prepare an adjusted payables control account and reconcile this to the total list of balances. 12 Marks (b) Briefly explain why it is necessary to prepare a bank reconciliation statement. The following information has been obtained from the books of Tom Limited for the year ended 31 December 2019: Opening payables control account balance at 1 January 2019 Cheque payments to payables 237,200 187,130 32,100 Discounts received during the year Contras 9,124 Credit purchases during the year 156,242 48,770 Credit notes received during the year On extracting a list of balances from the payables ledger (purchases ledger), the accountant found that they totalled £81,804. On further investigation the following errors were discovered: 1. An invoice for £4,000 in respect of purchases from Midge Limited was not recorded in the purchases day book. 4 2. Purchases from Mr Dimico of £2,000 have been wrongly entered in Mrs Barton's individual account in the receivables ledger. 3. The purchases day book contained a transcription error whereby £25,340 was brought forward onto the following page as £43,340. 4 4. The discounts received column of the cash payments book has been overcast by £2,100. 5. Invoices amounting to £18,120 have been included in the control account but not in the purchases ledger. 6. In preparing the list of balances from the purchases ledger, credit balances of £1,268 were incorrectly analysed as debit balances.< 7. A contra of £3,940 has been posted to the control accounts without updating the ledgers. 4 8. Discounts received from Shirley Limited of £30 were recorded as £102 in the cash book and omitted entirely from the postings to the purchases ledger. Requirement (a) Prepare an adjusted payables control account and reconcile this to the total list of balances. 12 Marks (b) Briefly explain why it is necessary to prepare a bank reconciliation statement.

Answer rating: 100% (QA)

Adjusted Payables Control Account Balance as per the ledeger 81804 ... View the full answer