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The document provides financial data for Tirelo Morwa, a sole trader, as of December 31, 2020, including revenue, expenses, and balances for various accounts. It also includes additional information regarding inventory valuation, accrued rent, prepaid insurance, bad debts, and depreciation methods for assets. Additionally, it outlines a separate exercise for Lucas, a trader, requiring the preparation of sales and purchase ledger accounts for January 2023 and discusses the advantages of control accounts.

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10 views

New Microsoft Word Document (3)

The document provides financial data for Tirelo Morwa, a sole trader, as of December 31, 2020, including revenue, expenses, and balances for various accounts. It also includes additional information regarding inventory valuation, accrued rent, prepaid insurance, bad debts, and depreciation methods for assets. Additionally, it outlines a separate exercise for Lucas, a trader, requiring the preparation of sales and purchase ledger accounts for January 2023 and discusses the advantages of control accounts.

Uploaded by

chitenomhle
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Question 2

1. The following balances were extracted from the books of Tirelo Morwa, sole trader, at 31
December 2020.
P
Revenue 19 000
Purchases 14 600
Owner’s equity 13 910
Trade receivables 3 200
Trade payables 3 900
Opening inventory ( 1 January 2020) 1 050
Rent, rates and insurance 610
Wages and salaries 900
Bank 1 400
Cash 1 620
Drawings 750
Motor van at cost 8 000
Machinery at cost 9 000
Provision for depreciation:
Motor van (1 January 2020) 1 600
Machinery (1 January 2020) 1 800
Discount received 1 100
Sales returns 180

Additional information
1 At 31 December 2020:
Inventory was valued at P1250
Rent accrued amounted P150
Insurance prepaid amounted to P120
2 A bad debt of P80 should be written off
3 Depreciation is to be provided:
Motor van at 10% per annum using the straight line method.
Machinery at 20% per annum using the reducing balance.

CLASS EXERCISE 3 (IGCSE 2023 )


Lucas is a trader. He has provided the following information
P
Balances at 1 January 2023
Sales ledger control account 14 940 debit
Purchase ledger control account 8 450 credit

Totals for January 2023


Credit sales 12 736
Cash sales 3 992
Credit purchases 7 325
Returns to credit suppliers 463
Returns from credit customers 920
Cash received from credit customers 685
Bank payments to credit suppliers 6 675
Bank transfers received from credit customers 10 620
Irrecoverable debts written off 140
Discount received 210
Contra entries 180
Interest charged on overdue purchases ledger accounts 166
REQUIRED:
(a) Prepare the sales ledger account for January 2023. Balance the account and bring down the
balance at 1 February 2023. (6)
(b) Prepare the purchase ledger account for January 2023. Balance the account and bring down the
balance 1 February 2023. (7)
(c) State two advantages of preparing control accounts (2)

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