Question

5. The following transactions were extracted from the books of Adamu, a sole trader for the month of March 2016. March 4: Sold 80 bags of maize on credit to Papuk at GH¢255 per bag subject to a trade discount of 5%. March 10: Sold goods on credit to Abass for GHc1,170. March 15: Received a cheque from Papuk for the amount due less a discount of 10%. March 20: Received cash of GH¢900 from Abass. You are required to prepare the: (a) Sales Journal; (b) Customers' Accounts in the Sales Ledger; (c) Sales Ledger Control Account.

Accepted Answer

See the Sales Journal, Papuk Account, Abass Account, and Sales Ledger Control Account tables in the Diagram column. Sales to Papuk (80 bags x GH¢255 = GH¢20,400, less 5% trade discount of GH¢1,020) = GH¢19,380. Papuk pays via cheque less a 10% cash discount (GH¢1,938), settling the account in full. Abass's account records the GH¢1,170 credit sale, a GH¢900 cash payment received, leaving a balance of GH¢270 owing. The Sales Ledger Control Account totals GH¢21,570 on the debit side (from total sales of GH¢20,400 and GH¢1,170) and is balanced by the cheque received (GH¢17,442), discount allowed (GH¢1,938), cash received (GH¢900), and the closing balance owed (GH¢270).

WAEC Accounting 2019 Theory — Question 5

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