QUESTION 3 CREDITORS RECONCILIATION The information given below was extracted fr

Question

QUESTION 3 CREDITORS RECONCILIATION The information given below was extracted from the records of Zebro Traders for May 2017 REQUIRED Prepare the correct Creditors Control account for May 2017. Balance the account Prepare the corrected Creditors List as at 31 May 2017. INFORMATION Credit balance in the Creditors control account on 01 May 2017 3.1 3.2 R256 500 Merchandise purchased on credit 660 600 446 400 642 150 7 560 14 400 270 Cheques issued to creditors in payment of s and discounts received Interest charged by a creditor on an overdue account 69 PROGRAMME HANDBOOK: JANUARY 2018 INTAKE MANCOSA: BBA YEAR 1 70 CREDITORS UST AS AT 31 MAY 2017 Creditor Union Limited Voltex Suppliers Tropical Manufacturers Southgate Enterprises Proworx Wholesalers Debit Credit 41 400 63 180 169 200 30 600 2 700 2 700 304 380 1 The balance in the account of Proworx Wholesalers must be transferred to their account in the 2. A credit note received from Union Limited for merchandise returned was not recorded in the 3. An invoice received from Tropical Manufacturers for goods purchased was correctly entered in the Additional information not yet recorded: Debtors ledger Purchases Returns Journal, R8 100, Purchases journal as R7 500 but erroneously posted to their account as R9 120 in the Creditors ledger. An electronic funds transfer to Voltex Suppliers in part settlement of account was not recorded in the Cash Payments Journal, R6 300. A cheque to Southgate Enterprises for R9 000 was correctly recorded in the Cash Payments Journal but treated as a purchase in the supplier's account in the Creditors ledger 4. 5.

Explanation / Answer

Creditors Control Account Cheques issued 642150 Opening Balance 256500 Purchase Return 7560 Credit purchases 660600 Contra Entry 2700 Credit purchases-Stationery 14400 Interest on Overude 270 Balance c/d 279360 931770 931770 Creditors List as at 31st May 2017 Union Limited 33300 Note-1 Voltex Suppliers 56880 Note-2 Tropical Manufacturers 167580 Note-3 South gate Enterprises 21600 Note-4 279360 Note: 1 Balance of Union Limited will be reduced by 8100 due to purchase return 2 Voltex Suppliers account will be 6300 for payment not recorded 3 Tropical Manufacturers account will be reduced by 1620 due to wrong recording 4 South gate Enterprises balance will be reduced by 9000 due to wrong treatment of purchase

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