Prepare a purchases ledger control account, Financial Accounting

Assignment Help:

Question:

The following information was extracted from the books of William Noel for the year ended 30 April 2009.
                                                                            Rs
Purchases Ledger Balance as at 1 May 2008    43120
Credit purchase for the year                             824 140
Credit purchases returns                                  12 400
Cheques paid to creditors                                 745 980
Cash purchases                                                 8 940
Discount received on credit purchases               31 400
Credit balances transferred to sales ledger accounts 5 210

The total of the balances in Noel's purchases ledger amounts to Rs 67 660, which does not agree with the closing balance in the Control account.

The following errors were then discovered:

1. Discount received had been overstated by Rs 1 000.
2. A credit purchases invoice for Rs 2 040 had been completely omitted from the books.
3. The purchases ledger account had been understated by Rs 100.
4. A credit balance of Rs 850 in the purchases ledger had been set off against a contra entry in the sales ledger, but no entry had been made in the control accounts.
5. A payment of Rs 1 450 had been debited to the creditor's account but was omitted from the bank account.
6. A credit balance of Rs 3 210 had been omitted from the list of creditors.

Required:

a. Prepare a Purchases Ledger Control Account for the year ended 30 April 2009.

b. Explain why it is useful to maintain a control account in respect of both trade receivables and trade payables.

c. Explain briefly how a contra entry might arise.


Related Discussions:- Prepare a purchases ledger control account

Produce an adjusted purchases ledger account, Question: Andrew Hegel ma...

Question: Andrew Hegel manufactures garments in his Malagasy Factory. In an effort to remain competitive he continually switches between suppliers.. This has resulted in extra

Petition by creditor-bankruptcy, Petition by creditor Any creditor incl...

Petition by creditor Any creditor including an assignee of a debt, may petition, provided: The debt due to him amounts to at least Shs 1,000; The debt is certain and i

Continuous compounding, In Section we had established an association among ...

In Section we had established an association among the effective and nominal rate of interest where compounding arise n times a year that is as given: r = (1 +  k/m ) m - 1

Persons who may petition-liquidation of companies, Persons Who May Petition...

Persons Who May Petition A petition may be presented by any of the following: A Creditor : A creditor may petition if his debt exceeds Shs 1,000 and is undisputed. The ord

Amortization of patents, Ely purchased a patent (with a remaining legal lif...

Ely purchased a patent (with a remaining legal life of ten years) from Backo on January 1, 2010 for $300,000. Ely expected to use the patent for five years. The carrying value on B

Antitrust laws, Antitrust Laws - Assignment Help One of the foundations...

Antitrust Laws - Assignment Help One of the foundations of business within the United States is the freedom to compete in the marketplace; however, certain laws have been creat

Operating leases, Staples INC has operating leases. Assuming a discount rat...

Staples INC has operating leases. Assuming a discount rate of 9%, adjust the current balance sheet for the presences of these leases. Which reported expenses would change if these

Financial statements, Describe the following questions:- Q.1 Explain how...

Describe the following questions:- Q.1 Explain how financial statements assist in the capital allocation process. How are financial statements limited? Which financial statement

Designs income statement, Please use the information below to complete Form...

Please use the information below to complete Form 1120S and the Schedule K-1%u2019s for Form 1120S. Blank forms can be found on the Hands-On Assignment page or in Doc Sharing. If y

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd