- This topic has 3 replies, 2 voices, and was last updated 4 years ago by
.
- Posts
Q. Alpha is a sole trader who does not keep proper accounting records.
Alpha’s first year of trading was 20X4. From reviewing Alpha’s bank statements and the incomplete records relating to cash maintained, the following summary has been compiled.
Bank and cash summary, Alpha, 20X4
$Cash received from credit customers and paid into the bank 381,600
Expenses paid out of cash received from credit customers before banking 6,800
Cash sales 112,900Other information, Alpha, 20X4
Irrecoverable debts written off 7,200
Closing balance of Trade receivables 0Which of the following correctly represents Alpha’s sales figure for 20X4?
A $508,500
B $112,900
C $381,600
D $494,100The answer is A how?
They paid into the bank 381,600. This was after paying out expenses of 6,800, and so the total cash received from credit customers must have been 381,600 + 6,800 = 388,400
There were no closing receivables, but there had been irrecoverable debts of 7,200. Therefore the total credit sales must have been 388,400 + 7,200 = 395,600.
In addition there were cash sales of 112,900.
So the total sales were 395,600 + 112,900 = 508,500.
- The topic ‘Incomplete records bpp revision kit question No. 20.12’ is closed to new replies.