Question

Question 4 (17 marks) You have just received the 30 June 2020 bank statement of Zoom Electronics from Costco Bank. To assist you in your bank reconciliation, you have gathered the following information i Zoom Electronics' cash account shows a balance of $2,900 on 30 June ii. The bank statement includes two dishonoured cheques from customers of $400 (cheque number 190) and $110 (cheque number 192). Hi, The following Zoom Electronics cheques are outstanding at 30 June Cheque number Amount (5) 137 50 188 170 191 520 194 580 195 50 196 140 V. iv. Zoom Electronics collects from some customers through EFT. The June bank statement lists a $1,300 EFT deposit for a collection on account. The bank statement includes two deposits that Zoom Electronics has not recorded yet: $970 for dividend revenue and $80 interest revenue camed. vi. The bank statement included a $30 bank service charge. vii. On 30 June, Zoom Electronics deposited $350 but this deposit is not reflected on the bank statement viii The bank statement included a $1,000 deduction for a cheque drawn by Webex Lid. Zoom Electronics has notified the bank of this error. ix The 30 June 2020 bank balance is $4.870. Requirements: Prepare the bank reconciliation for Zoom Electronics at 30 June 2020. a. (9.5 marks) b. Record the necessary journal entries (including narrations) from the bank reconciliation (7.5 marks)

Answer 1

(a)

Bank Reconciliation for Zoom Electronics as at 30 June 2020
				$
Balance as per cash Account		2900
Less	Dishonoured Cheques from customers
	Cheque No.	190	400
	Cheque No.	192	110
Less	Bank Service Charge	30
Less	Deposit not reflecting
	in bank statement	350
Less	For Webex Ltd deduction
	in bank statement	1000	1890
				1010
Add	Outstanding Cheques not
	cleared from bank
	Cheque No.	137	50
	Cheque No.	188	170
	Cheque No.	191	520
	Cheque No.	194	580
	Cheque No.	195	50
	Cheque No.	196	140
			1510
Add	Collection from customers
	not included in cash account	1300
Add	Deposit of dividend
	not included in cash account	970
Add	Deposit for interest
	not included in cash account	80	3860
Balance as per Bank statement	4870

(b) Necessary Journal entries from the bank reconciliation are as follows :

Date	Description	Debit	Credit
Jun-20	Customers			510
	Cash				510
	(To record the dishonoured
	Cheques (400 + 110) from
	Customers now reversed)
Jun-20	Cash			1300
	Customers			1300
	(EFT Transaction now
	recorded )
Jun-20	Cash			970
	Dividend Earned		970
	(Dividend earned
	now recorded)
Jun-20	Cash			80
	Interest earned		80
	(Interest earned now
	recorded )
Jun-20	Bank Charges		30
	Cash				30
	( Bank Charges
	now recorded)

June 20 Webex Ltd 1000

Cash 1000

(Bank debited $1000 for Webex Ltd

as cheque drawn)   

Notes : 1) Cheques not cleared from bank are not to be recorded in cash book because those are correct entries.

2) On 30th June , $350 deposition is not reflecting in bank statement so that is error from bank side and thus no entry to be passed in cash book and in next month error will be corrected from bank side.

3) $1000 deduction from bank for Webex Ltd for cheque drawn was a error but it was recorded because in future

this error can be adjusted from Webex Ltd account.