No. 1(a): Preparation of Cash Book for the month of 31st March 2018. Workings: 1. 26th March 2018 the total of the cheque to Jeff’s Air-Con: Cheque will equal $7,500 less a 5% discount. The discount equals 5% x $7500 = $375. Therefore the cheque total equals = $7,500 - $375 = $7,125. 2. 30th March 2018 the total of the cheque received from Layby Stores: Invoice total on the 13th March sent to Layby Stores equals $2,250 less 20% trade discount. The discount equals 20% x $2,250 = $450. Therefore the invoice total equals = $1,800. 19th March 2018 the total of the credit note sent to Layby Stores equals $200 less 20% trade discount. The discount equals 20% x $200 = $40. Therefore the credit note total equals $200 - $40 = $160. This means that the total on Layby Store’s account on the 30th March 2018 = $1800 - $160 = $1640. Layby Stores was given a cash discount of $150 therefore the cheque received from Layby will equal $1640 - $150 = $1,490. Now that the workings has been completed the Cash Book for the month ended 31st March, 2018 can be prepared. No. 1(b): The significance of the balance brought down on the bank account at 31st March 2018: The balance of the bank account at the 31st March 2018 is credit of $1,035. This means that Sanjeev's bank account is in overdraft. He owes the bank $1,035 as at the 31st March 2018. No. 1(c): Preparation of DD Ltd’s account showing the balance outstanding at the end of March 2018: 5th March 2018 the total of the invoice received from DD Ltd:Invoice will equal $7,500 less a 25% discount. The discount equals 25% x $7500 = $1,875. Therefore the invoice total equals = $7,500 - $1,875 = $5,625. 14th March 2018 the total of the credit note received from DD Ltd equals $800 less 25% trade discount The discount equals 20% x $800 = $200. Therefore the credit note total equals = $800 - $200 = $600. This means that the total owed to DD Ltd 31st March 2018 = $5,625 - $600 = $5,025. Now that the workings has been completed DD Ltd's account for the month of March 2018 can be prepared. I hope that you found this proposed solution helpful! If you did please share it! Also, feel free to ask any questions or to make your comments below. Good Luck!
5 Comments
Speciale
5/7/2019 03:31:22 pm
Why was DD Ltd. wasn't in 1a answer?
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Krystal
5/8/2019 09:16:54 pm
Hi Speciale!
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Leah
5/9/2019 11:29:16 am
I attempted the entire paper
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Accounting Lyceum
5/10/2019 12:51:25 am
Hi Leah!
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Jose A
3/7/2020 12:14:34 pm
Thank you for making the answer sheets, appreciate it.
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AuthorThe author holds a Bsc (Hons) Degree in Applied Accounting from Oxford Brookes University, England and enjoys a successful career as an Accounting Supervisor and a private tutor. Archives
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