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Difficulty: HardCalculation of Total Sales and Total Purchases

The following information was extracted from the incomplete accounting records of Adebayo Traders for the year ended 31st December 2025:

- Debtors balance (1st January 2025): ₦14,500
- Debtors balance (31st December 2025): ₦18,200
- Cash received from trade debtors: ₦62,400
- Discounts allowed to customers: ₦1,800
- Returns inwards: ₦1,200
- Bad debts written off: ₦900
- Dishonoured cheques from debtors: ₦1,500
- Cash sales deposited into bank: ₦24,500

What is the total sales figure for Adebayo Traders for the year ended 31st December 2025?

  1. ₦93,000Answer
  2. B
    ₦96,000
  3. C
    ₦91,200
  4. D
    ₦68,500

Answer

The total sales figure for the year ended 31st December 2025 is ₦93,000.
To find total sales under incomplete records, a Total Debtors Control Account is prepared to reconstruct credit sales. The credit side items total ₦84,500 (Cash received ₦62,400 + Discounts allowed ₦1,800 + Returns inwards ₦1,200 + Bad debts ₦900 + Closing debtors ₦18,200). Subtracting the known debit items totaling ₦16,000 (Opening debtors ₦14,500 + Dishonoured cheques ₦1,500) gives credit sales of ₦68,500. Adding cash sales of ₦24,500 yields the total sales figure of ₦93,000.

Step-by-Step Solution

1
Calculate the credit side total of the Total Debtors Control Account.
Cash Received (₦62,400) + Discounts Allowed (₦1,800) + Returns Inwards (₦1,200) + Bad Debts (₦900) + Closing Debtors (₦18,200) = ₦84,500.
All reductions in debtors balances and the closing balance belong on the credit side.
2
Calculate the known debit side items of the Total Debtors Control Account.
Opening Debtors (₦14,500) + Dishonoured Cheques (₦1,500) = ₦16,000.
Opening balance and transactions that increase debtor obligations (like dishonoured cheques) are debited.
3
Determine Credit Sales by taking the balancing figure of the Total Debtors Control Account.
Credit Sales = ₦84,500 - ₦16,000 = ₦68,500.
Credit sales are the missing debit item required to balance the account.
4
Calculate Total Sales by summing Credit Sales and Cash Sales.
Total Sales = ₦68,500 + ₦24,500 = ��93,000.
Total sales consist of both credit sales and cash sales during the accounting period.

Key Concept

Derivation of Total Sales from Incomplete Records
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Topics

Calculation of Total Sales and Total Purchases

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