On 30 June 2023, Maximo’s cash book showed that he had an overdraft of K300 on his current account at the bank. A bank statement as at the end of June 2023 showed that Maximo was in credit with the bank by K65. On checking the cash book with the bank statement you find the following. (a) Cheques drawn, amounting to K500, had been entered in the cash book but had not been presented. (b) Cheques received, amounting to K400, had been entered in the cash book, but had not been credited by the bank. (c) On instructions from Maximo the bank had transferred interest received on his deposit account amounting to K60 to his current account, recording the transfer on 5 July 2023. This amount had, however, been credited in the cash book as on 30 June 2023. (d) Bank charges of K35 shown in the bank statement had not been entered in the cash book. (e) The payments side of the cash book had been undercast by K10. (f) Dividends received amounting to K200 had been paid direct to the bank and not entered in the cash book. (g) A cheque for K50 drawn on deposit account had been shown in the cash book as drawn on current account. (h) A cheque issued to Jones for K25 was replaced when out of date. It was entered again in the cash book, no other entry being made. Both cheques were included in the total of unpresented cheques shown above. Required (a) Indicate the appropriate adjustments in the cash book. (b) Prepare a statement reconciling the amended balance with that shown in the bank statement.
On 30 June 2023, Maximo’s
account at the bank. A bank statement as at the end of June 2023 showed that Maximo was in
credit with the bank by K65.
On checking the cash book with the bank statement you find the following.
(a) Cheques drawn, amounting to K500, had been entered in the cash book but had not been
presented.
(b) Cheques received, amounting to K400, had been entered in the cash book, but had not
been credited by the bank.
(c) On instructions from Maximo the bank had transferred interest received on his deposit
account amounting to K60 to his current account, recording the transfer on 5 July 2023.
This amount had, however, been credited in the cash book as on 30 June 2023.
(d) Bank charges of K35 shown in the bank statement had not been entered in the cash book.
(e) The payments side of the cash book had been undercast by K10.
(f) Dividends received amounting to K200 had been paid direct to the bank and not entered
in the cash book.
(g) A cheque for K50 drawn on deposit account had been shown in the cash book as drawn
on current account.
(h) A cheque issued to Jones for K25 was replaced when out of date. It was entered again in
the cash book, no other entry being made. Both cheques were included in the total of
unpresented cheques shown above.
Required
(a) Indicate the appropriate adjustments in the cash book.
(b) Prepare a statement reconciling the amended balance with that shown in the bank statement.
Step by step
Solved in 4 steps
