Question

Problem 84 Waits opened a business bank account with £16,000 on 14 April 2019. During April he issued cheques totaling £72,760 and banked cheques totaling £80,060. These transactions were entered into his cash book up to 30th April 2019. On receiving his bank statement for April he discovered the following: (1) A cheque for £4,800, which was banked (and included in the receipts above), had been returned by the bank marked "No funds available". No adjustment has been made in the cash book. (2) Bank charges debited on the bank statement for April amounted to £600. No entries for these have been made in the cash book (3) Cheques totaling £16,860 recorded in the cash book and sent to suppliers were not presented to the bank until May 2019. (4) Cheques totaling £12,100 had been entered into the cash book but not credited by the bank until May 2019. Required: Calculate the corrected bank balance which should appear in the business cash book at 30 April 2019 and prepare a bank reconciliation statement at 30th April 2019. Cash book balance should be: Cash book balance as it appears at 30 April 2019 Corrected closing cash book balance This is the figure that should appear in the company's S of FP.

Answer 1

Cash book balance should be: 16000 + 80060 - 72760 = £23300

	£
Cash book balance as it appears at 30th April 2019	23300
Less: Cheque returned	4800
Less: Bank charges	600
Corrected closing cash book balance	17900

Bank reconciliation statement as at 30th April 2019

	£
Balance as per bank statement	22660
Add: Deposits in transit	12100
Less: Outstanding cheques	16860
Balance as per cash book (after correction)	17900