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QUESTION TWO (50 MARKS) The debtors' ledger control account of Watson showed the following balances: TZS.27, 000,000 DR. and TZS.650, 000 CR. on 31st December 2017. These figures did not agree with the schedule (list) of debtors balances extracted on the same date. An examination of the books revealed the following: 1. Discount allowed to a customer of TZS.120, 000 had been treated as discount disallowed of TZS.210, 000 in the debtors ledger control account. No entry was made to the customer's account. 2. Interest amounting to TZS. 95,000 charged to a customer's overdue account, had been correctly entered in the customer's account and entered as TZS.59,000 in the interest account. Following a complaint by the customer the charge was reduced to TZS.65,000. This reduction had not been entered in the books. 3. Sales of TZS.1,720,000 had been entered on the credit side of a customer's account. This included cash sales of TZS.1,240,000. 4. A contra entry of TZS.140,000 had been entered on the incorrect side of the control account. When making the entry in the customer's account the item was entered as TZS.410,000 on the incorrect sid 5. Bills receivable of TZS.560,000 was entered on the incorrect side of a customer's account. 6. Watson accepted returns of TZS.300,000 from a customer and this was entered correctly in the books. However, a credit note was sent showing a restocking charge of 10% of the sales price. The accounts clerk only made the necessary adjustment in the customer's account. Later, this charge was reduced to 5% but this reduction was not reflected in the account. REQUIRED: (i) Prepare the adjusted debtors' ledger control account. (10 marks) (ii) Prepare the adjusted schedule of debtors showing the original balance. (20marks) (iii) Give two reasons for preparing debtors' control accounts and explain two limitations of using control accounts. (20 marks)

QUESTION TWO (50 MARKS)
The debtors' ledger control account of Watson showed the following balances: TZS.27, 000,000 DR. and TZS.650, 000 CR. on 31st December 2017. These figures did not agree with the schedule (list) of debtors balances extracted on the same date. An examination of the books revealed the following:
1. Discount allowed to a customer of TZS.120, 000 had been treated as discount disallowed of TZS.210, 000 in the debtors ledger control account. No entry was made to the customer's account.
2. Interest amounting to TZS. 95,000 charged to a customer's overdue account, had been correctly entered in the customer's account and entered as TZS.59,000 in the interest account. Following a complaint by the customer the charge was reduced to TZS.65,000. This reduction had not been entered in the books.
3. Sales of TZS.1,720,000 had been entered on the credit side of a customer's account. This included cash sales of TZS.1,240,000.
4. A contra entry of TZS.140,000 had been entered on the incorrect side of the control account. When making the entry in the customer's account the item was entered as TZS.410,000 on the incorrect sid
5. Bills receivable of TZS.560,000 was entered on the incorrect side of a customer's account.
6. Watson accepted returns of TZS.300,000 from a customer and this was entered correctly in the books. However, a credit note was sent showing a restocking charge of 10% of the sales price. The accounts clerk only made the necessary adjustment in the customer's account. Later, this charge was reduced to 5% but this reduction was not reflected in the account.
REQUIRED:
(i) Prepare the adjusted debtors' ledger control account. (10 marks)
(ii) Prepare the adjusted schedule of debtors showing the original balance. (20marks)
(iii) Give two reasons for preparing debtors' control accounts and explain two limitations of using control accounts. (20 marks)

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