Tangan Bertuah Bhd is a new company operated in Northern region of Malaysia. As of 31 October 2020, the Tangan Bertuah Bhd’s cash account per its general ledger showed the following balance. CASH Date Explanation Ref. Debit(RM) Credit(RM )Balance(RM) October 31 Balance 33,822 The bank statement from Jibrail Bank Bhd on that date showed the balance as at 31 October 2020 was RM34,022.50. A comparison of the details on the bank statements with the details in the cash account revealed the following facts: 1. The statement included a debit memo of RM200 for the printing of additional company checks. 2. Cash sales of RM4,180.75 on 12 October were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for RM4,230.75, the bank credited Tangan Bertuah Bhd for the correct amount. 3. Outstanding checks at 31 October totalled RM1,381.25, and deposits in transit were RM4,680.75. 4. On 18 October, the company issued check no. 211222 for RM3,425 to Mikail Sdn Bhd, on account. The check, which was cleared by the bank, was incorrectly journalized and posted by Tangan Bertuah Bhd as RM3,290. 5. A RM10,000 note receivable was collected by the bank for Tangan Bertuah Bhd on 31 October plus RM400 interest. The bank charged a collection fee of RM15. No interest has been accrued on the note. 6. Included with the cancelled checks was a check issued by Kasturi Enterprise to Jebat Bertuah Sdn Bhd for RM3,000 that was incorrectly charged to Tangan Bertuah Bhd by the bank. 7. On 31 October, the bank statement showed a NSF (non-sufficient fund) charge of RM3,500 for a check issued by Penjaga Kota Enterprise, a customer to Tangan Bertuah Bhd on account. REQUIRED: (a) Prepare the bank reconciliation as at 31 October 2020. (b) Briefly explain TWO (2) reasons how a bank account could be an internal control mechanism
Tangan Bertuah Bhd is a new company operated in Northern region of Malaysia. As of 31 October 2020, the Tangan Bertuah Bhd’s cash account per its general ledger showed the following balance.
CASH
Date Explanation Ref. Debit(RM) Credit(RM )Balance(RM)
October 31 Balance 33,822
The bank statement from Jibrail Bank Bhd on that date showed the balance as at 31 October 2020 was RM34,022.50. A comparison of the details on the bank statements with the details in the cash account revealed the following facts:
1. The statement included a debit memo of RM200 for the printing of additional company checks.
2. Cash sales of RM4,180.75 on 12 October were deposited in the bank. The cash receipts
3. Outstanding checks at 31 October totalled RM1,381.25, and deposits in transit were RM4,680.75.
4. On 18 October, the company issued check no. 211222 for RM3,425 to Mikail Sdn Bhd, on account. The check, which was cleared by the bank, was incorrectly journalized and posted by Tangan Bertuah Bhd as RM3,290.
5. A RM10,000 note receivable was collected by the bank for Tangan Bertuah Bhd on 31 October plus RM400 interest. The bank charged a collection fee of RM15. No interest has been accrued on the note.
6. Included with the cancelled checks was a check issued by Kasturi Enterprise to Jebat Bertuah Sdn Bhd for RM3,000 that was incorrectly charged to Tangan Bertuah Bhd by the bank.
7. On 31 October, the bank statement showed a NSF (non-sufficient fund) charge of RM3,500 for a check issued by Penjaga Kota Enterprise, a customer to Tangan Bertuah Bhd on account.
REQUIRED:
(a) Prepare the bank reconciliation as at 31 October 2020.
(b) Briefly explain TWO (2) reasons how a bank account could be an internal control mechanism
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