Use the information given below to answer the following questions:
Wrigley Ltd uses subsidiary ledgers for debtors and creditors. At 1 July 2011 debtors owed $7000 and creditors were owed $4000. Transactions for year ended 30 June 2012 were as follows:
$$\begin{array} { l r }
& \$ \
\text { Cash purchases } & 6000 \
\text { Credit purchases } & 11000 \
\text { Cash sales } & 15000 \
\text { Credit sales } & 20000 \
\text { Cash paid to creditors } & 9000 \
\text { Cash received from debtors } & 18000 \
\text { Discount received from creditors } & 500 \
\text { Discount allowed to debtors } & 700
\end{array}$$
-What was the balance of the creditors control account at 30 June 2012?
A) $11 500
B) $6500
C) $5500
D) $6000

Question

Use the information given below to answer the following questions:
Wrigley Ltd uses subsidiary ledgers for debtors and creditors. At 1 July 2011 debtors owed $7000 and creditors were owed $4000. Transactions for year ended 30 June 2012 were as follows:
$$\begin{array} { l r } 
& \$ \
\text { Cash purchases } & 6000 \
\text { Credit purchases } & 11000 \
\text { Cash sales } & 15000 \
\text { Credit sales } & 20000 \
\text { Cash paid to creditors } & 9000 \
\text { Cash received from debtors } & 18000 \
\text { Discount received from creditors } & 500 \
\text { Discount allowed to debtors } & 700
\end{array}$$ 
-What was the balance of the creditors control account at 30 June 2012?
A) $11 500
B) $6500
C) $5500
D) $6000

Quizplus · Accepted Answer

The total credit purchases were $11000, deducting the discount received from creditors of $500, the net credit purchases would be $10500. Adding the opening balance of creditors of $4000 to the net credit purchases, we get total creditors of $14500. 
The cash paid to creditors was $9000, hence there was a remaining balance of $5500 which is the balance of the creditors control account at 30 June 2012.

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