Reference no: EM132429226

Question - Dumpstars Ltd purchases inventory on credit from a large number of suppliers. The company maintains a purchase ledger as well as a purchase ledger control account in its general ledger. At the end of April the balance of $25,450 on the purchase ledger control account failed to agree with the total of balances from the purchase ledger, the total of the list of credit supplier's balances was $27,370.

After an investigation you discover that:

1. Goods costing $350 purchased on credit from Echo had been entered in the purchase day book as $600. The entry made in the purchase ledger was correct.

2. A payment of $1,500 to Farmer had been correctly recorded in the general ledger but had entered as $1,550 in Farmer's individual account in the purchase ledger.

3. The return of goods purchased on credit costing $800 had been entirely omitted from the books.

4. The purchase day book had been totally incorrectly at the end of the month by $2,220 too little.

You are required to:

A- Calculate the correct amount for the purchase ledger account in the general ledger.

B- Produce a reconciliation of the purchase ledger balance to the general ledger.