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Hi everyone. I am also new in this forum and I need your help.
I can not balance Cash Book and Bank Reconciliation Statement.
Please help. The issue is this:The following is the cash book for the month of May 2009.
Cash Book
US$0000 US$,000
Debtors 737 Balance b/f 1197
Creditors 698
Staff Allowances 315
Local Staff Salaries 122
Drawings 84
Balance c/f 16792416 2416
Balance b/f 1679The following information were not taken into consideration:
a. Bank charges of US$7,700 was shown in the bank statement but not recorded in the cash book.
b. Two cheques issued to creditors (Payables Account) of US$3,230 and US$5,600 were not recorded in the bank statement.
c. Three cheques received from debtors (Receivables Account) of US$1,020, US$4,000 and US$3,200 each were not recorded in the bank statement
d. A cheque received from a debtor of US$1,500 was not honored by the bank and was not adjusted in the cash book
e. Bank interest of US$250 was credited in the bank statement but not recorded in the cash book.
f. A bank transfer received from a staff member to pay the debt of outstanding telephone charges owed to company amounting to US$2,500 was not recorded in the cash book.You are required to:
i. Update the cash book
ii. Prepare the bank reconciliation statement using the adjusted cash book.Hello !
Please check the answer:
Adjusted Cash Book (Bank Column Only
(Dr.)
$
(Cr.)
$
Bank Interest
250
Bal. b/d
1679
Direct Credit
2500
Bank Charges
7700
Bal. c/d (adjusted)–7029
Dishonoured Chq—400
9779
9779
Bal. b/d
7029Bank Reconciliation Statement
Balance per CB (Cr.)
7029Add: Chqs Deposited but not cleared—- (1020 + 4000 + 3200)
8220
Less: Chqs issued but not cashed
(3230 + 5600)
(8830)Balance per bank statement (Dr.)
6419HTH
Thank you very much.
1. I just wonder if Dishonoured Chq—400 is right because it is mentioned uder “d” that amount of cheque received from a debtor is US$1,500 which was not honored.
2. If we have Cr. balance, as per Cash Book, should we start Bank statement with “-“. In our case it will be (-7029)+8220(-8830).
Please explainQuote:1. I just wonder if Dishonoured Chq—400 is right because it is mentioned uder “d” that amount of cheque received from a debtor is US$1,500 which was not honoredAbacus ! Can you please re-phrase this one, didn’t really get your point.
Quote:2. If we have Cr. balance, as per Cash Book, should we start Bank statement with “-”. In our case it will be (-7029)+8220(-8830).Credit balance (bank column only) means we are in overdraft (O/D). Obviously that would be true in case of bank statement (Debit balance). If, say, that is a credit balance, then you will prepare a statement, which would reconcile the balances shown by the both statement. This statement is known as bank reconciliation statement (just reinforcing the point).
I would personally advise you not to use “-” or “+” signs, as this would cause confusion.
HTH
1. On the Cash Book you wrote Dishonoured Chq are 400. If you read carefuly my question uder “d” dishonored chq are 1,500.
Quote:1. On the Cash Book you wrote Dishonoured Chq are 400. If you read carefully my question under “d” dishonored chq are 1,500Hello !
Then lets make it $1,500:
——————-Adjusted Cash Book (Bank Column Only ——————
(Dr.)———————-$————————————–(Cr.)——————$
Bank Interest———250————————————Bal. b/d————-1679
Direct Credit———2500———————————-Bank Charges——-7700
Bal. c/d (adjusted)–8129———————————-Dishonoured Chq—1,500
————————10,879——————————————————-10,879
——————————————————————–Bal. b/d———-8129Bank Reconciliation Statement
Balance per CB (Cr.)——————————————————————–8129
Add: Chqs Deposited but not cleared—- (1020 + 4000 + 3200) ————–8220
Less: Chqs issued but not cashed——– (3230 + 5600)————————(8830)Balance per bank statement (Dr.)—————————————————7519
Please check the answer.
Thanks
you welcome….
If you have any further questions, please do not hesitate to mention me @shunmas
Till then:
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