I am doing an assignment for HLC and I am pretty stuck. Something doesn't make sense to me and I need someone with more knowledge to explain it please.
After checking the items in both the PL and the SS, I found the following:
PL-
Payment of £986 not in SS (paid towards the end of the month after the statement was sent out.
SS-
Sales return of £106 not in PL.
Sales invoice of £845 not in PL.
Now the PL balance shows as £2487
The SS balance shows as £4212
The reconciliation form shows the following which I have filled out:
£
Balance per supplier account in Purchase Ledger
(2487)
Adjustments unticked items on Statement:
Less-Sales return- CN 245
106
Add-Sales- Invoice 4935
845
Adjustments unticked items in Purchase Ledger:
Add-Payment on 29.10
986
Balance per Supplier Statement
(4212)
Is this correct? I am unsure as even though the statement shows £4212 as the balance owed to them, as a company, I only owe £3226 as I have already made a payment of £986 which does not show on the statement. But then again, this payment will show up on the next statement to my company, so is this why I must make the reconciliation agree with the SS balance of £4212?
Thank you Johnny. That is my confusion exactly. I see your workings which is what I would have done, except for the fact that the exercise only shows balance per PL and balance per Statement at the bottom. Making me come to the conclusion that the workings must come to the Statement balance, which would be incorrect. I really don't get it, especially since it then asks to make a full payment to clear out the balance. Which if I do per your workings it would be correct on the other hand if I do it per the exercise, it would be incorrect as I would be overpaying. Thank you for your help.
Yes, I have and that's why this was putting me off. I am going to send the £3226 as it is the correct answer. If that's not what they are looking for, then they'll have to explain why, I guess.
I can't load your workings Johnny, is ods open office?
Not sure how the question is written on the exercise, Maria, but if it was that the full balance is per the supplier statement then it's a pointless exercise in reconciliation. Based on your reconciliation, the balance outstanding to the supplier is £3226. Without seeing the question asked, but based on what you've described, a full payment to clear out the balance would be £3226 (in my opinion)
Just one slight thing that puzzles me, you said
Making me come to the conclusion that the workings must come to the Statement balance, which would be incorrect. The point is, your workings have come to the statement balance. (2487) 106 (845) = (3226) then add back the payment already made (986) = (4212)
__________________
John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
You can save the output from Open Office in Word or Excel formats Johnny. Provided that its nothing complex it should port ok.
We had to do that for a while on my boys PC as he tried using OpenOffice for his school work but after a while we just decided that it wasn't software that was up to his needs for sixth form (they use lots of the more exotic bits of Excel, Word and Powerpoint in his business studies) so he's now got office 2013 installed.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Statement of Account from Bramcote Craft Suppliers
STATEMENT OF ACCOUNT
From:
Bramcote Craft Suppliers
To:
Lingsford Craft Supplies
Bramcote Road
Unit 20, Lingsford Way
Southwell
Teeside
Teeside
TE1 5PQ
TE54 7YN
Statement
Date:
31 October 201Y
Account reference:
LCS002
Date
Details
Debit
Credit
Balance
201Y
£
£
£
1 Oct
Balance b/down
986
2 Oct
Sales (Invoice 4801)
453
1,439
3 Oct
Sales Returns (Credit Note 241)
96
1,343
10 Oct
Sales (Invoice 4815)
1,452
2,795
16 Oct
Sales (Invoice 4826)
542
3,337
21 Oct
Sales (Invoice 4910)
136
3,473
27 Oct
Sales Returns (Credit Note 245)
106
3,367
29 Oct
Sales (Invoice 4935)
845
4,212
Amount due
4,212
VAT Reg No. 541 1424 178
The tasks read:
I- Using the Supplier Statement received today from Bramcote Craft Suppliers, and the account information given on page 11, reconcile the supplier statement to the purchase ledger account and prepare a Supplier Statement Reconciliation on page 9 of the answer booklet.
J- Prepare a remittance advice and cheque for payment of all invoices and credit notes to clear the account of Bramcote Craft Suppliers as shown in Lingsfords General Ledger. The remittance advice and cheque should be dated 4 November 201Y. The remittance advice and cheque should be dated 4November 201Y and Bramcote Craft Suppliers address is Bramcote Road, Southwell, Teeside, TE54 7YN.
This was the feedback from the tutor after submitting the assignment:
Task I On the item £986, the description should be clearly mentioned as Payment not yet entered.
Task J The remittance advice should include the invoices for which the payment is made and deduct any credit notes under consideration. Payment received should not be deducted. It should be as follows,
