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Difficulty: MediumPreparation of Final Accounts from Incomplete Records

A trader who maintains incomplete accounting records provides the following information for the financial year ended 31 December 2025:

- Debtors balance at 1 January 2025: ₦25,000
- Cash received from debtors during the year: ₦140,000
- Discount allowed to debtors: ₦5,000
- Bad debts written off: ₦3,000
- Debtors balance at 31 December 2025: ₦32,000
- Cash received from direct cash sales: ₦45,000

What is the total sales figure for the year?

  1. ₦200,000Answer
  2. B
    ₦155,000
  3. C
    ₦184,000
  4. D
    ₦193,000

Answer

The total sales figure for the year is ₦200,000.
To determine total sales when converting incomplete records into final accounts, a Debtors Control Account must be reconstructed. Crediting the control account with cash received (₦140,000), discount allowed (₦5,000), bad debts written off (₦3,000), and closing debtors (₦32,000) gives a credit total of ₦180,000. Subtracting opening debtors (₦25,000) yields credit sales of ₦155,000. Adding direct cash sales (₦45,000) gives the total sales of ₦200,000.

Step-by-Step Solution

1
Reconstruct the Sales Ledger / Debtors Control Account to find Total Credit Sales.
Total Credit Side = Cash Received (₦140,000) + Discount Allowed (₦5,000) + Bad Debts (���3,000) + Closing Debtors (₦32,000) = ₦180,000.
Debtors Control Account is credited with items that reduce debtor obligations and closing balances.
2
Deduct opening debtors balance from the total credit side of the control account to derive credit sales.
Credit Sales = ₦180,000 - ₦25,000 (Opening Debtors) = ₦155,000.
Credit sales represent the missing balancing figure on the debit side of the debtors control account.
3
Combine credit sales with cash sales to compute total sales.
Total Sales = ₦155,000 (Credit Sales) + ₦45,000 (Cash Sales) = ₦200,000.
Final trading accounts require comprehensive turnover combining both cash and credit sales.

Key Concept

Calculation of Total Sales from Incomplete Records using Debtors Control Account
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Topics

Preparation of Final Accounts from Incomplete Records

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