21.6 Re-creating the Debtors Control ledger
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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.
![© 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](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
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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