The following information pertains to C. Munachim Electronics Limited for the month of January 2018:
₦
January
1 Accounts receivable balances 6,462,945 Debit
17 Cash refund to Mrs. Bill for paying the wrong amount
on invoice number 2018/01/0008 953,000
31 Total revenue from credit customers for the month 14,394,400
31 Total revenue from customers who paid cash for
Inventory during the month 10,650,980
31 Cheques received from customers for unpaid
balances in the month 10,051,920
31 Credit alerts received from customers
in C.Munachim Electronics Limited bank account 5,675,890
31 Cash received from customers for unpaid balances
in the month 1,718,040
31 The following customers were expected to pay the
amounts on the invoice issued to them by November
2017.
A grace period of one month was given to them, yet,
they defaulted in payment. The customers and
amounts owed by them are:
₦
Mrs. C.I. Chima 2,100,000
Mrs. O.R. Emeka 1,075,000
Interest of 10.14 percent is charged on overdue customer debts.
31 Returns from customers during the month 411,420
31 Accounts receivable balances from the sales ledger 4,275,020 Debit
Required: Prepare the Receivables Ledger Control Account for January 2018.
Suggested answer to practice activity 7.4
Note:
1. Interest on overdue debt is calculated as follows:
₦
Mrs. C.I. Chima 2,100,000
Mrs. O.R. Emeka 1,075,000
Total 3,175,000
Interest on overdue debt is 10.14% of the amount due.
10.14% of 3,175,000 = ₦321,945
2. Total revenue from customers who paid cash for inventory during the month amounts to ₦10,650,980. This amount will not be recorded in the receivables ledger control account. The transaction does not emanate from credit customers.
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