Question

MODULE 10-ACCOUNTING INFORMATION SYSTEM AND INTERNAL CONTROL TUTORIAL SOLUTIONS Question 22 On 31 May 2015 Computec Ltd had a cash balance as per company records of $5,681.50 debit. The bank statement from Community Bank on that date showed a credit balance of $7,784.60. A comparison of the statement with the cash account revealed the following facts: 1. The statement included a debit entry of $60 for the printing of additional company cheques. 2. Cash sales of $836.15 on 12 May were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $846.15. The bank credited Computec Ltd for the correct amount. 3. Unpresented cheques at 31 May totalled $1.276.25, and outstanding deposits were $836.15. 4. On 18 May Computec Ltd issued cheque no. 1181 for $685 to M. Helms on account. The cheque, which cleared the bank in May, was incorrectly journalized and posted by Computec Ltd for $658. 5. A $3,000 note receivable was collected by the bank for Computec Ltd on 31 May plus $80 interest. The bank charged a collection fee of $20. No interest has been accrued on the note. 6. Included with the cheques paid was a cheque issued by Teller Pty Ltd to P. Jonet for $600 that was incorrectly charged to Computec Ltd by the bank. 7. On 31 May the bank statement showed a dishonoured cheque of $700 that had been issued by W. Hoad, a customer, to Computec Ltd. Required a. Prepare the bank reconciliation as at 31 May 2016 b. Prepare the necessary adjusting entries as at 31 May 2016

Answer 1

Adjusting Entries: Credit Debit 60 1.) Bank Charges Bank (Cash Book) 60 2.) Sales Cash 10 Balance as per Cash Book 5,681.50 Less: Debit Entry not reflected in Cash Book -60.00 Rectification of Deposit Entry -10.00 836.15(-)846.15 Outstanding Deposits -836.15 Rectification for Cheque No. 1181 -27.00 658(-) 685 Incorrectly Charged due to Bank Error -600.00 Cheque Dishonoured -700.00 Sub Total 3,448.35 Add: Unpresented Cheques 1,276.25 Note Receivable and Interest (Net Amoui 3,060.00 3000+80- 2 5 Balance as per Bank 7,784.60 27 4.) Accounts Payable Bank Cheque no. 1181 27 3060 20 .) Bank Bank Charges Notes Receivable Interest 3000 80 700 7.) Accounts Receivable Bank 700