Prepare the Sales Ledger Control account for the month of May 2011.

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To prepare the Sales Ledger Control account, we will list all transactions that affect the total amount owed by customers.

Sales Ledger Control Account

The Sales Ledger Control account is a summary of all individual customer accounts. It typically has a debit balance, representing the total amount owed by customers.

Debit entries increase the amount owed by customers.
Credit entries decrease the amount owed by customers.

Identify and record the opening balances.
The opening debit balance is $27,640. The opening credit balance is $545.
Identify and record transactions that increase the sales ledger balance (debit entries).
Total invoices sent to customers (credit sales) increase the amount owed.
Identify and record transactions that decrease the sales ledger balance (credit entries).
Goods returned by customers, cheques received, discounts allowed, and contra entries (setting off balances against the purchase ledger) all reduce the amount owed by customers. The cheque received for a previously written-off bad debt does not affect the Sales Ledger Control account as the debt was already removed.
Record the closing credit balance.
A credit balance in the sales ledger means some customers have overpaid. This is a liability and is shown on the debit side of the control account to balance it, then brought down as a credit balance for the next period.
Calculate the total debits and total credits to find the closing debit balance.
$\begin{array}{|l|l|r|l|l|r|} \hline \textbf{Date} & \textbf{Particulars} & \textbf{Amount (\$)} & \textbf{Date} & \textbf{Particulars} & \textbf{Amount (\$)} \\ \hline \text{2011} & & & \text{2011} & & \\ \text{May 1} & \text{Balance b/d} & 27,640 & \text{May 1} & \text{Balance b/d} & 545 \\ \text{May 31} & \text{Sales} & 109,650 & \text{May 31} & \text{Returns Inwards} & 2,220 \\ \text{May 31} & \text{Balance c/d (Credit)} & 800 & \text{May 31} & \text{Bank} & 98,770 \\ & & & \text{May 31} & \text{Discounts Allowed} & 3,150 \\ & & & \text{May 31} & \text{Contra (Purchase Ledger)} & 2,624 \\ & & & \text{May 31} & \text{Balance c/d (Debit)} & 30,781 \\ \hline & \textbf{Total} & \textbf{138,090} & & \textbf{Total} & \textbf{138,090} \\ \hline \text{Jun 1} & \text{Balance b/d} & 30,781 & \text{Jun 1} & \text{Balance b/d} & 800 \\ \hline \end{array}$
Calculation of Debit Balance c/d:
Total Debits = $27,640 (Opening Debit Balance) +$ 109,650 (Sales) + $800 (Closing Credit Balance) =$ 138,090
Total Credits (excluding closing debit balance) = $545 (Opening Credit Balance) +$ 2,220 (Returns Inwards) + $98,770 (Bank) +$ 3,150 (Discounts Allowed) + $2,624 (Contra) =$ 107,309

Debit Balance c/d = Total Debits - Total Credits (excluding closing debit balance)
Debit Balance c/d = $138,090 -$ 107,309 = $30,781

The debit balance carried down at 31 May 2011 is $\boxed{\text{30,781}}$ .

Prepare the Sales Ledger Control account for the month of May 2011.

Answer

Step-by-step solution

Identify and record the opening balances.

Identify and record transactions that increase the sales ledger balance (debit entries).

Identify and record transactions that decrease the sales ledger balance (credit entries).

Record the closing credit balance.

Calculate the total debits and total credits to find the closing debit balance.

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