Q.2.2Prepare the individual account of L. Simpson in the debtors ledger of Towel Talk for February 2021. (Round off to the nearest rand) The following information was taken from the books of Towel Talk for January and February 2021:List of balances in the Debtors Ledger of Towel Talk as at 31 January 2021:DebtorFolAmountL SimpsonD1R12 000Marvel LtdR13 900R9 600D2R GreenD3Home Centre LtdD4R2 300R16 500R54 300D PatelD5O The Independent Institute of Education (Pty) Ltd 2021Page 4 of 8212021Debtors Journal of Towel Talk- February 2021DOC NO DATEDETAILSFOL DEBTORSSOUTPUTSALESCONTROLVATINV2032Marvel LtdD217 2502 25015 000INV2048Home Centre LtdD424 1503 15021 000INV20512L. SimpsonD12 8753752 500INV20618D. PatelD59 77512758 500INV20722R. GreenD31 093143950INV20824L. SimpsonD15 1756754 500INV209D. Patel2 00028D52 30030062 6188 16854 450Debtors Allowances Journal of Towel Talk - February 2021DOC NODATEDETAILSFOL DEBTORSSALESINPUT VATCONTROLRETURNSCN454Marvel LtdD22 8753752 500CN4613L. SimpsonD157575500CN4723R. GreenD323030200CN4825L. SimpsonD15 1756754 5008 85511557 700Cashbook Receipts of Towel Talk - February 2021DOCDATEDETAILSFOLBANKDEBTORSOUTPUTSALESSUNDRIESNOCONTROL VATFOL DETAILSCR333 1B. Pitt20 7002 70018 000CR334H.3 7954953 300ServicesHomerRenderedDR2814L.D18 0008 000SimpsonCR33519Cash27 6003 60024 000DR2923D. PatelD524 96124 961DR3026L.D15 9855 985Simpson91 04138 9466 79542 0003 300 212021General Journal of Towel Talk - February 2021DOCDATE DETAILSFOL DEBITCREDITNOJV2523Sales1 143Input VAT171Debtors Control/D. PatelD51314(Settlement Discount of 5%)JV2626Sales274Input VAT41Debtors Control/L. SimpsonD1315(Settlement Discount of 5%)JV2728Credit losses23 000Input VAT3 450Debtors Control/HomeD426 450Centre(Amount written off as irrecoverable)JV2828Debtors Control/Marvel LtdD2?Interest Received?(Interest for the month on overdueaccount at 10% per annum calculatedon the month end balance)Additional information:The cheque received from L. Simpson on the 26th February in settlement of her accountwas returned by the bank marked R/D on the 28th February 2021. This transaction has notyet been recorded.The debtors control and debtors list was reconciled on the 31" January 2021

Answered: Prepare the individual account of L.…

Prepare the individual account of L. Simpson in the debtors ledger of Towel Talk for February 2021. (Round off to the nearest rand)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Q.2.2Prepare the individual account of L. Simpson in the debtors ledger of Towel Talk for February 2021. (Round off to the nearest rand)

The following information was taken from the books of Towel Talk for January and February 2021:
List of balances in the Debtors Ledger of Towel Talk as at 31 January 2021:
Debtor
Fol
Amount
L Simpson
D1
R12 000
Marvel Ltd
R13 900
R9 600
D2
R Green
D3
Home Centre Ltd
D4
R2 300
R16 500
R54 300
D Patel
D5
O The Independent Institute of Education (Pty) Ltd 2021
Page 4 of 8
21
2021
Debtors Journal of Towel Talk- February 2021
DOC NO DATE
DETAILS
FOL DEBTORSS
OUTPUT
SALES
CONTROL
VAT
INV203
2
Marvel Ltd
D2
17 250
2 250
15 000
INV204
8
Home Centre Ltd
D4
24 150
3 150
21 000
INV205
12
L. Simpson
D1
2 875
375
2 500
INV206
18
D. Patel
D5
9 775
1275
8 500
INV207
22
R. Green
D3
1 093
143
950
INV208
24
L. Simpson
D1
5 175
675
4 500
INV209
D. Patel
2 000
28
D5
2 300
300
62 618
8 168
54 450
Debtors Allowances Journal of Towel Talk - February 2021
DOC NO
DATE
DETAILS
FOL DEBTORS
SALES
INPUT VAT
CONTROL
RETURNS
CN45
4
Marvel Ltd
D2
2 875
375
2 500
CN46
13
L. Simpson
D1
575
75
500
CN47
23
R. Green
D3
230
30
200
CN48
25
L. Simpson
D1
5 175
675
4 500
8 855
1155
7 700
Cashbook Receipts of Towel Talk - February 2021
DOC
DATE
DETAILS
FOL
BANK
DEBTORS
OUTPUT
SALES
SUNDRIES
NO
CONTROL VAT
FOL DETAILS
CR333 1
B. Pitt
20 700
2 700
18 000
CR334
H.
3 795
495
3 300
Services
Homer
Rendered
DR28
14
L.
D1
8 000
8 000
Simpson
CR335
19
Cash
27 600
3 600
24 000
DR29
23
D. Patel
D5
24 961
24 961
DR30
26
L.
D1
5 985
5 985
Simpson
91 041
38 946
6 795
42 000
3 300

21
2021
General Journal of Towel Talk - February 2021
DOC
DATE DETAILS
FOL DEBIT
CREDIT
NO
JV25
23
Sales
1 143
Input VAT
171
Debtors Control/D. Patel
D5
1314
(Settlement Discount of 5%)
JV26
26
Sales
274
Input VAT
41
Debtors Control/L. Simpson
D1
315
(Settlement Discount of 5%)
JV27
28
Credit losses
23 000
Input VAT
3 450
Debtors Control/Home
D4
26 450
Centre
(Amount written off as irrecoverable)
JV28
28
Debtors Control/Marvel Ltd
D2
?
Interest Received
?
(Interest for the month on overdue
account at 10% per annum calculated
on the month end balance)
Additional information:
The cheque received from L. Simpson on the 26th February in settlement of her account
was returned by the bank marked R/D on the 28th February 2021. This transaction has not
yet been recorded.
The debtors control and debtors list was reconciled on the 31" January 2021

Expert Solution

Step 1

Accounts Receivable

Accounts receivable is one of the important element of firm which can generate more liquidity position to the organisation as well. Prompt receipts of accounts receivable is essential for the organisation to generate more liquidity which is helpful to repay the debt obligation of the firm as well.

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EA14. LO 9.6 Arvan Patel is a customer of Bank’s Hardware Store. For Mr. Patel’s latest purchase on January 1, 2018, Bank’s Hardware issues a note with a principal amount of $480,000, 13% annual interest rate, and a 24-month maturity date on December 31, 2019. Record the journal entries for Bank’s Hardware Store for the following transactions. Note issuance Subsequent interest entry on December 31, 2018 Honored note entry at maturity on December 31, 2019. Solution