The document describes how to recreate a debtors control ledger for a small business for the month of January 2015. It provides the opening balance of debtors as $3,000 on January 1st. It then lists expected credit sales, discounts given, bad debts, and sales returns for the month. It calculates the estimated collections from debtors as $18,000 by taking the total sales and payments and subtracting discounts, bad debts, returns, and the closing balance. Recreating the debtors control ledger involves tracking additions like sales and payments in, and subtractions like discounts, debts, and returns out to calculate the estimated collections amount.

1. 21.6
RE-CREATING THE
DEBTORS CONTROL
LEDGER

2. © Michael Allison, Trinity Grammar School.
Author’s permission required for external use
 Budgeting often requires the recreation of Debtors Control…
21.6 RE-CREATING THE DEBTORS
CONTROL LEDGER
Example: on 1 January 2015, a
small business had debtors of
$3,000
• Credit sales for January are
expected to be $20,000 (plus
$2,000 GST)
• Discounts given to debtors will
total $500 (jncl. GST)
• Bad debts of $300 (incl.
GST)are expected
• Sales returns will be $200 (incl.
GST)
• The amount owing by debtors on
31 January 2015 will be $6,000
What is the estimated collections from
debtors for January 2015?
Debtors Control [A]
Example: on 1 January 2015, a
small business had debtors of
$3,000
• Credit sales for January are
expected to be $20,000 (plus
$2,000 GST)
• Discounts given to debtors will
total $500 (jncl. GST)
• Bad debts of $300 (incl.
GST)are expected
• Sales returns will be $200 (incl.
GST)
• The amount owing by debtors on
31 January 2015 will be $6,000
Debtors Control [A]
1/1 Balance 3000
Debtors Control [A]
1/1 Balance 3000
31/1 Sales/GST 22000
Debtors Control [A]
1/1 Balance 3000
31/1 Sales/GST 22000 31/1 Discount exp. 500
Debtors Control [A]
1/1 Balance 3000
31/1 Sales/GST 22000 31/1 Discount exp. 500
31/1 Bad debts 300
Debtors Control [A]
1/1 Balance 3000
31/1 Sales/GST 22000 31/1 Discount exp. 500
31/1 Bad debts 300
31/1 Sales returns 200
Debtors Control [A]
1/1 Balance 3000
31/1 Sales/GST 22000 31/1 Discount exp. 500
31/1 Bad debts 300
31/1 Sales returns 200
31/1 Balance 6000
1/2 Balance 6000
What is the estimated collections from
debtors for January 2015?
Debtors Control [A]
1/1 Balance 3000 31/1 Bank XXXX
31/1 Sales/GST 22000 31/1 Discount exp. 500
31/1 Bad debts 300
31/1 Sales returns 200
31/1 Balance 6000
1/2 Balance 6000
How can we solve for X?
Debtors Control [A]
1/1 Balance 3000 31/1 Bank XXXX
31/1 Sales/GST 22000 31/1 Discount exp. 500
31/1 Bad debts 300
31/1 Sales returns 200
31/1 Balance 6000
25000 25000
1/2 Balance 6000
$25,000
- $6,000
- $200
- $300
- $500
= $18,000
Debtors Control [A]
1/1 Balance 3000 31/1 Bank XXXX
31/1 Sales/GST 22000 31/1 Discount exp. 500
31/1 Bad debts 300
31/1 Sales returns 200
31/1 Balance 6000
25000 25000
1/2 Balance 6000
Debtors Control [A]
1/1 Balance 3000 31/1 Bank XXXX
31/1 Sales/GST 22000 31/1 Discount exp. 500
31/1 Bad debts 300
31/1 Sales returns 200
31/1 Balance 6000
25000 25000
1/2 Balance 6000
Debtors Control [A]
1/1 Balance 3000 31/1 Bank XXXX
31/1 Sales/GST 22000 31/1 Discount exp. 500
31/1 Bad debts 300
31/1 Sales returns 200
31/1 Balance 6000
25000 25000
1/2 Balance 6000
Debtors Control [A]
1/1 Balance 3000 31/1 Bank XXXX
31/1 Sales/GST 22000 31/1 Discount exp. 500
31/1 Bad debts 300
31/1 Sales returns 200
31/1 Balance 6000
25000 25000
1/2 Balance 6000
Debtors Control [A]
1/1 Balance 3000 31/1 Bank XXXX
31/1 Sales/GST 22000 31/1 Discount exp. 500
31/1 Bad debts 300
31/1 Sales returns 200
31/1 Balance 6000
25000 25000
1/2 Balance 6000
Debtors Control [A]
1/1 Balance 3000 31/1 Bank 18000
31/1 Sales/GST 22000 31/1 Discount exp. 500
31/1 Bad debts 300
31/1 Sales returns 200
31/1 Balance 6000
25000 25000
1/2 Balance 6000

3. © Michael Allison, Trinity Grammar School.
Author’s permission required for external use
 Budgeting often requires the recreation of Debtors Control…
Debtors Control [A]
Debtors Control balance will  when…
Credit sales made to debtors
GST charged to debtors
Debtors Control balance will  when…
Receipts from debtors
Discount expense given to debtors
Bad debts for irrecoverable debtors
Sales returns from debtors
Any of these could be X… you need to know
everything that goes in Debtors
21.6 RE-CREATING THE DEBTORS
CONTROL LEDGER

4. © Michael Allison, Trinity Grammar School.
Author’s permission required for external use
TASK
In-class Homework
Ex21.7 X
Ex21.8 X