Question

PLEASE TURN OVER Question 3 20 Marks The following is a summary of a cash book as presented by George Ltd for the month of October: Receipts Balance c/d 1,469 554 2,023 Balance b/d Payments 761 1.262 2,023 All receipts are banked and all payments are made by cheque On investigation you discover: (1) Bank charges of R136 entered on the bank statement have not been entered in the cash book. (2) Cheques drawn amounting to R267 had not been presented to the bank for payment. (3) Cheques received totaling R762 had been entered in the cash book and paid into the bank, but had not been credited by the bank until 3 November. (4) A cheque for R22 for sundries had been entered in the cash book as a receipt instead of as a payment. (5) A cheque received from K Jones for R80 had been returned by the bank and marked 'No funds available'. No adjustment has been made in the cash book. (6) A standing order for a business rates instalment of R150 on 30 October had not been entered in the cash book (7) All dividends received are credited directly to the bank account. During October amounts totaling R62 were credited by the bank but no entries were made in the cash book. (8) A cheque drawn for R66 for stationery had been incorrectly entered in the cash book as R60. (9) The balance brought forward in the cash book should have been R711, not R761. Required: (a) Show the adjustments required in the cash book. (b) Prepare a bank reconciliation statement as at 31 October

Answer 1

2 dr. adjusted cash book amount (in R)date cr. 3 date particulars amount (in R) particulars 7. to dividend received by balance b/d 4 62 761 8. to extra balance b/d 1. by bank charges 4. by sundries credited wrong by sundries expense 5. by cheque dishonoured 6. by standing order 50 136 (761-711) 22 to balance c/d 1065 22 80 150 8. by stationary expense 10 б total 11 1177 1177 12 bank reconcilation statement 13 14 date particulars amount In R amount in R balance as per cash book 15 -1065 add: 2. cheque drawn but 16 not presented 17 267 less: cheque received but 18 not credited 19 -762 -495 20 balance as per passbook 21 -1560 ш

note: sundry expense is credited twice because first rectification is made and then actual expense is recorded