You are employed as an accountant for Banda, a sole trader. He operates an integrated computerized...

 

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You are employed as an accountant for Banda, a sole trader. He operates an integrated computerized system for payables and receivables. It is at end of the accounting year and you have just discovered that the following errors: 1. Sales invoices totalling K300,000 had been omitted from Banda's accounting records. 2. Irrecoverable debts of K6,000 were not recorded in the general ledger. 3. One of Banda's suppliers gave him a cash discount of K10,000 which both his trainee accountants recorded as though it was a purchase invoice. 4. A contra entry offsetting a balance of K75,000 due to a supplier against the receivables ledger account for the same company had not been recorded in the control accounts. 5. One of the purchase invoices for K87,650 was entered in the accounting records as K76,850. 6. One of the entries in the purchases day book was entered as K38,250 instead of K33,750. 7. One account balance in the receivables ledger was overstated by K4,000. 8. A payment made to a supplier of K112,500 was treated as if it was a receipt from a customer. The control accounts were otherwise correctly recorded for this. 9. The total of discounts allowed of K22,600 from the cash book was not included in the control account. 10. Banda received a refund of K19,500 for previously overpaying his suppliers. This has not been included in the control account. 11. Credit balances in the payables ledger amounting to K14,275 had been included in the payables list as though they were debit balances. 12. Cash received from a customer of K83,800 was not recorded in the receivables ledger. 13. Sales returns amounting to K41,900 had been omitted from a personal customer account. Prior to the discovery of these errors, Banda obtained the following details from the ledgers (balances before the above transactions): Receivables Control account balances b/f: Payables Control account balances b/f: List of Receivables balance (net) b/f List of payables balance (net) b/f Required: 'K' Debit 936,600 Credit 864,150 Debit 850,200 Credit 892,600 Prepare the following corrected control and ledger accounts for Banda: (a) Corrected receivables ledger control balance account (b) Corrected receivables ledger total balance (c) Corrected payables ledger control account balance (d) Corrected payables ledger total balance (5 marks) (5 marks) (5 marks) (5 marks) [Total: 20 Marks] If+ You are employed as an accountant for Banda, a sole trader. He operates an integrated computerized system for payables and receivables. It is at end of the accounting year and you have just discovered that the following errors: 1. Sales invoices totalling K300,000 had been omitted from Banda's accounting records. 2. Irrecoverable debts of K6,000 were not recorded in the general ledger. 3. One of Banda's suppliers gave him a cash discount of K10,000 which both his trainee accountants recorded as though it was a purchase invoice. 4. A contra entry offsetting a balance of K75,000 due to a supplier against the receivables ledger account for the same company had not been recorded in the control accounts. 5. One of the purchase invoices for K87,650 was entered in the accounting records as K76,850. 6. One of the entries in the purchases day book was entered as K38,250 instead of K33,750. 7. One account balance in the receivables ledger was overstated by K4,000. 8. A payment made to a supplier of K112,500 was treated as if it was a receipt from a customer. The control accounts were otherwise correctly recorded for this. 9. The total of discounts allowed of K22,600 from the cash book was not included in the control account. 10. Banda received a refund of K19,500 for previously overpaying his suppliers. This has not been included in the control account. 11. Credit balances in the payables ledger amounting to K14,275 had been included in the payables list as though they were debit balances. 12. Cash received from a customer of K83,800 was not recorded in the receivables ledger. 13. Sales returns amounting to K41,900 had been omitted from a personal customer account. Prior to the discovery of these errors, Banda obtained the following details from the ledgers (balances before the above transactions): Receivables Control account balances b/f: Payables Control account balances b/f: List of Receivables balance (net) b/f List of payables balance (net) b/f Required: 'K' Debit 936,600 Credit 864,150 Debit 850,200 Credit 892,600 Prepare the following corrected control and ledger accounts for Banda: (a) Corrected receivables ledger control balance account (b) Corrected receivables ledger total balance (c) Corrected payables ledger control account balance (d) Corrected payables ledger total balance (5 marks) (5 marks) (5 marks) (5 marks) [Total: 20 Marks] If+

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The balance in the control Ac is always matching with the ledger balances In the given case due to e... View the full answer