Sales ledger question

March 2013 balance : £150,000

invoices raised: £60,000
credit notes: £48,000 + 10% restocking fee
bank receipts: £150,000

So, am i right in taking starting balance as +150,000, invoices raised as an asset (+60,000), credit notes as a liability (-48,000), restocking fee as an expense (+4800) and bank receipts as revenue (-150,000)

???

Answers

  • Yalda20Yalda20 Posts: 77Registered
    Hi there,
    I think it is easier to do a T account with these types of questions. Although, I cant seem to draw one here :(

    Dr Cr
    B/D 150,000 Credit note 43,200
    Invoices 60,000 Receipts 150,000
    C/D 16,800

    Total 210,000 210,000

    The re-stocking fee is an expense that the company has to bear and not the client. This is a client's ledger account so thus needs to be deducted from the credit note. 48,000-4,800=43,200.
    Is this the right answer?

    This is how I would do it.

    Thank you.


  • gabriellenlewisgabriellenlewis Posts: 129AAT Student
    Yalda20 said:

    Hi there,
    I think it is easier to do a T account with these types of questions. Although, I cant seem to draw one here :(

    Dr Cr
    B/D 150,000 Credit note 43,200
    Invoices 60,000 Receipts 150,000
    C/D 16,800

    Total 210,000 210,000

    The re-stocking fee is an expense that the company has to bear and not the client. This is a client's ledger account so thus needs to be deducted from the credit note. 48,000-4,800=43,200.
    Is this the right answer?

    This is how I would do it.

    Thank you.


    Thank you very much. The question does actually say that it is the sales ledger for Hill Ltd. Does this alter anything? Because if restocking fee is an expense to the company then it would still be a debit, right? (so +4800 and credit credit note: -48000)?
  • Yalda20Yalda20 Posts: 77Registered
    you are welcome. I had actually written the above numbers in a well organised T account but not sure why it looks like this now. Sometimes, if I struggle with my debits and credits I think about it logically and it helps.
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