Questions

1 David Railston

On 1 December 20X0 the following balances were extracted from the books of David Railston, a sole
trader:

Receivables ledger balances $

J Cotton 760 Dr

M Church 20 Cr

F Jones Ltd 340 Dr

B Sims 40 Dr (outstanding since 1 September 1997)

Payables ledger balances

Dee Supplies Ltd 200 Cr

S Farmer 480 Cr

P Turner 60 Cr

On 1 December 20X0 the total of the balances in the receivables ledger and the total of the balances in
the payables ledger agreed with the balances in the respective control accounts.

During December 20X0 the following transactions occurred:

Sales Day Book $ Sales Returns Day Book $
5 December J Cotton 1,200 13 December J Cotton 90
13 December F Jones Ltd 180 20 December P Turner 75
15 December M Church 1,530
15 December P Turner 1,470
21 December F Jones Ltd 870
Purchases Day Book $ Purchases Returns Day Book $
6 December Dee Supplies Ltd 500 20 December P Turner 50
14 December P Turner 400
20 December S Farmer 1,300
On 2 December 20X0, David Railston settled the accounts outstanding after deducting 5% cash discount.
On the same date he sent a cheque for 20 to M Church.

On 3 December 20X0, he received cheques from J Cotton and F Jones Ltd in full settlement of their
accounts less 5% discount.

On 10 December 20X0, the amount owed by B Sims was written off as a bad debt.

On 31 December 20X0, prior to balancing the accounts, the amount owed to P Turner in the payables
ledger was transferred to his account in the receivables ledger.
Required:

(i) Draw up the accounts which would appear in David Railston’s receivables ledger for the month
of December 20X0;

(ii) Prepare a receivables ledger control account for the month of December 20X0, reconciling the
balance with the total of trade receivables’ balances in the receivables ledger;

(iii) Prepare P Turner’s account for December 20X0 as it would appear in the payables ledger. The
accounts prepared in answer to (i) to (iii) above, should be balanced on 31 December 20X0.
2 Oak plc

The balance of the Receivables ledger Control A/c of Oak plc on 28 February Year 2 was $7,550 and this
did not agree with the total of the list of Receivables ledger balances which amounted to $8,807.
Investigations revealed the following errors and omissions, and when these have been dealt with, the
list total and the control account agreed:

1. A bad debt of $60 had been written off in the receivables ledger but no entry was made in the
control account.

2. Goods sold to B Brown $250 had been correctly entered in the Sales Day Book, but were posted
to the wrong side of Brown’s account in the receivables ledger.

3. Debit balances in the receivables ledger amounting to $120 had been omitted from the list of
balances.

4. Discounts allowed $50 had been correctly recorded in the receivables ledger, but were posted
to the wrong side of the control account.

5. A contra settlement of $300 had been made through the control accounts but no entry was
made in the personal accounts.

6. Goods sold in cash $90 had been wrongly entered in the control accounts as credit sales.

7. When listing the receivables ledger balances, a debit balance of $258 in a customer’s account
had been wrongly listed as $285.

8. Sales for February Year 2 amounting to $1,800 had been correctly posted to the personal
accounts, but no entry was made in the control account.

Required:

(a) Draw up the Receivables ledger Control A/c for the year ended 28 February Year 2, making the
necessary adjustments.

(b) Prepare a statement showing the adjusted Receivables ledger list total as at 28 February Year 2
Brian Parker

The balance of the Payables ledger Control A/c of Brian Parker, a retailer, on 31 August Year 6 was
$13,030. On the same date, the total of the list of payables ledger balances amounted to $11,916.

Subsequently the following errors came to light:

(a) The purchases day book was overcast by $252.

(b) Discount received from Oliver Keen $147 was posted to his account as $174.

(c) When listing the payables ledger balances, the credit balance of a supplier’s account $431
was overlooked.

(d) A contra settlement of $105 was omitted from the control accounts.

(e) The purchases returns total for August Year 6 was wrongly taken as $393, the correct total
being $293.

(f) The total of the discount received column in the cash book was under-added by $48.

(g) Cash $988 paid to James Daw, a supplier, was posted to his account as $889. The cash book
entry was correct.

(h) A bill of exchange for $450, drawn on Brian Parker by supplier Leonard Hay, was
dishonoured on maturity but no entry was made in Hay’s A/c in the payables ledger.

Required:

(i) Write up the Payables ledger Control A/c for the year ended 31 August Year 6, making the
necessary corrections.

(ii) Prepare a statement showing the corrected total of the list of payables ledger balances at
31 August Year 6.