In the draft accounts for the year ended 31st August, 2020 of Azay Ltd, the balance at the bank according to the cash book was a credit balance of GH¢894,680. Subsequently, the following discoveries were made: a. Bank  commission  charged  of  GH¢169,560  and  bank  interest  charged  of  GH¢109,100 have been entered in the  bank statement on 23 August, 2020 but not included in the cash book b.  Cheque for GH¢17,500 has been recorded twice as a credit in the cash book. c.  Traders’  credits  totalling  GH¢210,000  have  been  credited  in  the  bank  statement  on  26 August, 2020but not yet recorded in the cash book. d.  A cheque payment of GH¢145,000 has been recorded in the cash book as a receipt. e.  Cheque  dated  3  July,  2020  for  GH¢310,840  in  favour  of  Akos  Ltd  has  been  correctly recorded in the bank statement, but included in the cash book payments as GH¢310,840. f.  Cheques paid according to the cash book during August 2020 and totaling GH¢400,500 were not presented for payment to the bank until September 2020. g.  A  standing  order  payment  of  GH¢75,000  on  17  August  to  Townside  Publications  has been recorded in the bank statement but is not mentioned in the cash book. h.  Amounts  received  in  the  last  few  days  of  August  2020  totalling  GH¢1,895,600  and recorded in the cash book have not been included in the bank statement until September 2020. i.  The  recently  received  bank  statement  shows  a  cheque  of  GH¢29,450  received  from Kweku and credited in the bank statements on 9 August 2020 has now been dishonoured and the necessary entry passed in the bank statement on 26 August 2020. The only entry in the cash book for this cheque records its receipt on 8 August 2020.   Required: i.  Prepare  a  computation  of  the  balance  at  bank  to  be  included  in  Azay  Ltd’s Statement of Financial Position as at 31 August, 2020.                                       ii.  Prepare a Bank Reconciliation Statement as at 31 August, 2020 for Azay Ltd.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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In the draft accounts for the year ended 31st August, 2020 of Azay Ltd, the balance at the bank according to the cash book was a credit balance of GH¢894,680. Subsequently, the following discoveries were made:

a. Bank  commission  charged  of  GH¢169,560  and  bank  interest  charged  of  GH¢109,100 have been entered in the  bank statement on 23 August, 2020 but not included in the cash book
b.  Cheque for GH¢17,500 has been recorded twice as a credit in the cash book.
c.  Traders’  credits  totalling  GH¢210,000  have  been  credited  in  the  bank  statement  on  26 August, 2020but not yet recorded in the cash book.
d.  A cheque payment of GH¢145,000 has been recorded in the cash book as a receipt.
e.  Cheque  dated  3  July,  2020  for  GH¢310,840  in  favour  of  Akos  Ltd  has  been  correctly recorded in the bank statement, but included in the cash book payments as GH¢310,840.
f.  Cheques paid according to the cash book during August 2020 and totaling GH¢400,500 were not presented for payment to the bank until September 2020.
g.  A  standing  order  payment  of  GH¢75,000  on  17  August  to  Townside  Publications  has been recorded in the bank statement but is not mentioned in the cash book.
h.  Amounts  received  in  the  last  few  days  of  August  2020  totalling  GH¢1,895,600  and recorded in the cash book have not been included in the bank statement until September 2020.
i.  The  recently  received  bank  statement  shows  a  cheque  of  GH¢29,450  received  from Kweku and credited in the bank statements on 9 August 2020 has now been dishonoured and the necessary entry passed in the bank statement on 26 August 2020.

The only entry in the cash book for this cheque records its receipt on 8 August 2020.

 

Required:

i.  Prepare  a  computation  of  the  balance  at  bank  to  be  included  in  Azay  Ltd’s Statement of Financial Position as at 31 August, 2020.                                      

ii.  Prepare a Bank Reconciliation Statement as at 31 August, 2020 for Azay Ltd.

 

 

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