The Trade Receivables control account shows a closing balance of ₦850,000. The subsidiary ledger lists the following outstanding balances (all amounts in ₦):

Customer A: 200,000
Customer B: 150,000
Customer C: 120,000
Customer D: 180,000
Customer E: 100,000

During the year the following adjustments were made: Bad debts written off ₦30,000, Sales returns credited to customers ₦20,000, and a credit note of ₦10,000 issued to Customer C that was omitted from the subsidiary ledger. Determine the amount by which the control account is overstated and state the corrected balance that would agree with the subsidiary ledger.

Question

The Trade Receivables control account shows a closing balance of ₦850,000. The subsidiary ledger lists the following outstanding balances (all amounts in ₦):

Customer A: 200,000
Customer B: 150,000
Customer C: 120,000
Customer D: 180,000
Customer E: 100,000

During the year the following adjustments were made: Bad debts written off ₦30,000, Sales returns credited to customers ₦20,000, and a credit note of ₦10,000 issued to Customer C that was omitted from the subsidiary ledger. Determine the amount by which the control account is overstated and state the corrected balance that would agree with the subsidiary ledger.

Accepted Answer

Overstatement: 100000; Corrected balance: 690000

Neco 2018 Financial Accounting Question 45

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