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The following information was extracted from the books of Catherine Webb, a sole trader: ...

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Accounting

The following information was extracted from the books of Catherine Webb, a sole trader:

Trade Receivables Control Account balance 1 January 2020: 22,500 (Dr)

Trade Payables Control Account balance 1 January 2020: 36,750 (Cr)

Transactions in 2020 included the following:

Credit sales 30,800

Cash sales 56,000

Credit purchases 25,660

Cash purchases 45,860

Cash paid to credit suppliers 20,500

Cash received from credit customers 38,650

Discount received from suppliers 550

Credit purchases returns 265

Discount allowed to customers 400

Credit sales returns 295

Bad debts written off 455

Dishonoured cheques from customers 1,450

Interest charged to customers for overdue accounts 150

Contra entry 990

Cash sales returns 305

Requirement: (a) Prepare the trade receivables control account for Catherine Webb for the year ending 31 December 2020.

(b) Prepare the trade payables control account for Catherine Webb for the year ending 31 December 2020.

(c) If capital expenditure is incorrectly recorded in the financial statements as revenue expenditure, explain the impact on:

(i) Profit and net assets in the year in which the error is made

(ii) Profit in the following year

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