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Control Account Question

Forums › ACCA Forums › ACCA FA Financial Accounting Forums › Control Account Question

  • This topic has 9 replies, 2 voices, and was last updated 1 year ago by f6ali.
Viewing 10 posts - 1 through 10 (of 10 total)
  • Author
    Posts
  • July 26, 2013 at 2:02 am #134294
    catacca2012
    Member
    • Topics: 1
    • Replies: 2
    • ☆

    33 Jessie’s trial balance at 30 September 20X0 included:
    Debit $ Credit $
    Receivables ledger control account 90,350
    Allowance for doubtful debts brought forward 2,490
    The following information is also available:
    (1) No entries have been made in respect of cash of $1,320 received from Jeffrey whose balance had been written
    off last year, and
    (2) At 30 September 20X0 an irrecoverable balance of $1,950 is to be written off and the debtors allowance is to
    be adjusted to 1·5% of the remaining balance
    What figure will be reported in the statement of financial position at 30 September for receivables?
    A $89,564
    B $85,754
    C $87,074
    D $88,994

    July 26, 2013 at 2:25 am #134296
    enigma28
    Member
    • Topics: 3
    • Replies: 97
    • ☆☆

    $85754

    July 26, 2013 at 1:08 pm #134309
    catacca2012
    Member
    • Topics: 1
    • Replies: 2
    • ☆

    Explain the workings please. The answer given is C $87,074 though.

    July 26, 2013 at 2:13 pm #134312
    Sangria9
    Member
    • Topics: 25
    • Replies: 285
    • ☆☆☆

    Receivables: 90,350
    less 1,950 (write-off irrecoverable debts)
    less 1.5% of remaining 88,400 (i.e. less 1,326)

    And we receive 87,074 left in Receivables to be reported in SOFP.

    Notes:
    “Allowance for doubtful debts brought forward 2,490” – doesn’t matter for calculation of receivables in SOFP.
    “(1) No entries have been made in respect of cash of $1,320 received from Jeffrey” – doesn’t matter for calculation of receivables in SOFP for current year, because such receivables had been already written off from Receivables a/c in previous year.

    August 7, 2013 at 8:15 pm #135552
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 5
    • ☆

    Gross Receivables=$(90,350-1,950)=$88,400.
    SOFP:
    receivables $88,400
    allowance ($1,326)
    =net recei. $87,074.

    September 29, 2013 at 9:14 am #141633
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 5
    • ☆

    27074 is corect answer

    September 29, 2013 at 9:15 am #141634
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 5
    • ☆

    87074 is corect answer

    September 29, 2013 at 9:22 am #141637
    Anonymous
    Inactive
    • Topics: 0
    • Replies: 5
    • ☆

    opening balance of receivable ledger control account is written on debit side and receipts or bad debts are written on credit side…and allownce for bad debts are not written…so:
    opening balance=90350 , receipts=1320 . bad debts=1950
    1320+1950=3270
    90350-3270=87080
    the nearest answer is 87074 so option c is correct answer…did u get that?

    October 27, 2021 at 1:35 pm #639227
    Mehrubon
    Member
    • Topics: 0
    • Replies: 1
    • ☆

    Hey Bro your explanation is very clear, but I didn’t understand how you calculate the allowance (1326). Thank you in advance.

    October 31, 2021 at 11:29 am #639550
    f6ali
    Member
    • Topics: 10
    • Replies: 342
    • ☆☆☆

    Mehrubon wrote:Hey Bro your explanation is very clear, but I didn’t understand how you calculate the allowance (1326). Thank you in advance.

    Receivables balance before adjustments = $90,350
    Less: irrecoverable debt = ($1,950)
    Receivables balance c/f = $88,400

    The allowance is calculated on this amount.
    Allowance for doubtful debts = %88,400*1.5% = $1,326

    Are you clear now?

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