Nakul trades goods. He purchases and sells on credit. Most of his stock comes from one supplier, Nadia, who gives Nakul a trade discount of 20%.
The transactions below occurred in January 2022.
Jan 2 Paid $441 by cheque to Nadia, in full settlement of $450 owed to her at 1 January 2022.
Jan 12 Bought goods on credit from Nadia, list price $350
Jan 14 Returned faulty goods to Nadia, list price $80
Jan 18 Bought goods on credit from Nadia, list price $400
Jan 23 Sold goods on credit, $800
Jan 29 Bought goods on credit, $60, from Sophie
Jan 30 Returned goods to Sophie, $9
(a)[4]
Prepare the purchases journal for January 2022. Sum the journal and show the ledger account that would receive the total.
(b)[3]
Prepare the purchases returns journal for January 2022. Find the total for the journal and state the ledger account where that total should be posted.
(c)[6]
Prepare the account for Nadia, for January 2022, as it would appear in Nakul’s books. Balance the account and carry the balance down on 1 February 2022.
(d)[2]
Complete the table by adding a tick (✓) to show the place where each item appears on the statement of financial position.
(e)[5]
Advise Nakul whether he ought to take longer to pay his suppliers or not. Support your answer by giving two advantages and two disadvantages.
Worked solution & mark scheme
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