Question

Use the informa PAC 1502/101/3/2020 ASSIGNMENT 02 (continued) Information provided below, for Gift Dealers for the financial year ended June 20.8, to answer questions 10 and 11: wlowing information was obtained from the accounting records of Gift Dealers on the last day of the financial year of the business: GIFT DEALERS TRIAL BALANCE AS AT 30 JUNE 20.8 Trade receivables control.. Settlement discount granted. 35 476 Allowance for settlement discount granted.. 450 Allowance for credit losses 945 1 950 Credit losses. 3050 41 871 Additional information la) M Mike, a debtor who owed Gift Dealers an amount of R3 256. was declared insolvent. The amount must be written off as irrecoverable. (b) Gift Dealers determined on 30 June 20.8, that the allowance for credit losses should amount to R2 510. Creditors with debit balances amounted to R1 200 and debtors with credit balances amounted to R955. The debit balances in the trade payable control account needs to be transferred to the trade receivables control account and the credit balance in the trade receivables control account needs to be transferred to the trade payables control account. No transfer regarding these debit and credit balances has been processed yet. 10. Which of the following amount will represent the correct balance for the trade receivable control account as at 30 June 20.8 after taking the additional information into consideration? (1) R32 220 (2) R29 570 (3) R32 011 (4) R32 465 (5) R34 375 Which one of the following amounts will be disclosed on the face of the statement of Tinancial position under current asset for trade and other receivables as at 30 June 20.8. if you assume the balance for the trade receivable control account, after the additional information was taken into consideration, amounted to R41 500? (1) R38 990 (2) R38 045 (3) R38 605 (4) R39 100 (5) R30 920

Answer 1

(10) Trade Receivable control account will be Answer

Calculation as follows;

Trial Balance as 30 June - Trade Receivable Control = R35,476

Less. Written - off due to debtor Insolvent = R3,256

Add. Creditors with debit balance = R1,200 (same amount credited in trade payable)

Add. debtors with credit balance = R955 (same amount credited in trade payable)

Trade receivable balance after adjustment = R34,475