Question

14 Question 3 Jet is owner of Jet Cafe. At the end of each month, Jet prepares bank reconciliation statement for his business bank account. At 31 December 2019 his ledger balance was RM1,869 (credit) and his bank statement showed that he had funds of RM210 at the bank. He has the following information: (i) Jet has arranged for RM1,800 to be transferred from his personal bank account into the business bank account. The bank made the transfer on 30 December, but Jet has not made any entry for it in his records. On 21 December, Jet withdrew RM300 cash which he did not record. (iii) Cheque number 202018, which Jet issued to a supplier, appears on the bank statement as RM550. Jet incorrectly recorded the cheque as RM560. (iv) The bank debited Jet's account with charges of RM200 during December. Jet has not recorded these charges. On 31 December, Jet lodged RM450. On the bank statement, this amount is dated 3 January 2020. (vi) Jet was advised by the bank that he earned RM62 interest for the period in December that his account was in credit. Jet recorded this in December, but the bank did not credit his account until January 2020. (vii) Three of the cheques issued in December, with a total value of RM1,005, were not debited on the bank statement until after 31 December (viii) A cheque for RM276, issued to a supplier, was cancelled but Jet has not recorded the cancellation of the cheque. 3 e

Answer 1

VUUTT Answer(a) Date Cash at Bank Alc Amount Date RM 1,800 Dec 31,2019 Particulars Amount Balance bld RM 1,869 Particulars Jet' Capital Accounts Payable(RM 560 RM 550) Accounts Payable Balance c/d 10 Drawings Bank Charges 300 200 276 Dec 31,2019 283 RM 2,369 RM 2,369

Credit Journal Entries Date Accounts title and Explanation Dec 31 Cash Jet' Capital (To record cash invested in business) Debit RM 1,800 RM 1,800 Dec 31 RM 10 Cash Accounts Payable (To rectify error in recording cheque) RM 10 Dec 31 RM 276 Cash Accounts Payable (To record cheque cancelled) RM 276 Dec 31 RM 300 Drawing Cash (To record amount Withdrawn) RM 300 Dec 31 RM 200 Bank Service charges Cash (To record bank service charges ) RM 200

Answer(b) Jet Cafe Bank Reconciliation Statement As on December 31, 2019 Balance as per Bank Statement Add: Deposit in transit Interest Revenue not credited by bank RM 210 450 62 RM 722 (1,005) RM(283) Less: Outstanding Cheques Adjusted Bank Cash Balance RM(1,869) RM 1,800 Company's Cash Balance(Books) Add: Deposit not recorded Error in recording Cheque 202018(RM 560 - RM 550) Cheque cancelled but not recorded 10 276 2,086 RM217 Less: Cash Withdrawn not recorded Bank charges Adjusted Company's Cash Balance RM 300 200 (500) RM(283) Answer(c) The Bank Balance will be reported in the Balance Sheet as Bank Overdraft. The Balance to be shown in Balance Sheet is RM(283)