The cash book of Amofa Brothers showed a certain credit balance at 30th June 2007 while the bank statement showed a debit balance of GHC 1,162,000. On investigation, you made the following discoveries: Lodgements totalling GHC 762,000 had not been credited by the bank Cheques paid to suppliers totalling GHC 258,000 had not been presented to the bank A cheque for GHC 15,000 drawn on Amoafo Brothers had been wrongly debited by the bank Interest on Government Treasury Bills totalling GHC 52,100 were credited by the bank on 30th June; no entries were made in the cash book An issue of cheque for GHC 22,000 had been entered on the wrong side of the cash book A cheque for GHC 80,000 deposited on 20th June had been returned by the bank with the remarks “No funds available”, but no adjustment had been made in the cash book. A cheque of GHC 30,000 received from a customer had been correctly entered in the cash book but was credited by the bank as GHC 20,000 A cheque for GHC 6,600 drawn in respect of electricity bill had been incorrectly entered in the cash book as GHC 66,000 The bank statement showed banker’s charges totalling GHC 136,000; these had not been entered in the cash book. A cheque for GHC 10,000 paid to a supplier had been correctly entered in the cash book but debited by the bank as GHC 1,000. Cheques payment in favour of Amofa Brothers totalling GHC 4,500 had been correctly recorded in the bank statement , but included in the cash book payments as GHC 5,400 Required; Prepare the cash book and show the original balance and the adjusted balance Prepare a bank reconciliation statement as on 30th June, 2007.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The cash book of Amofa Brothers showed a certain credit balance at 30^th June 2007 while the bank statement showed a debit balance of GHC 1,162,000. On investigation, you made the following discoveries:
Lodgements totalling GHC 762,000 had not been credited by the bank
Cheques paid to suppliers totalling GHC 258,000 had not been presented to the bank
A cheque for GHC 15,000 drawn on Amoafo Brothers had been wrongly debited by the bank
Interest on Government Treasury Bills totalling GHC 52,100 were credited by the bank on 30^th June; no entries were made in the cash book
An issue of cheque for GHC 22,000 had been entered on the wrong side of the cash book
A cheque for GHC 80,000 deposited on 20th June had been returned by the bank with the remarks “No funds available”, but no adjustment had been made in the cash book.
A cheque of GHC 30,000 received from a customer had been correctly entered in the cash book but was credited by the bank as GHC 20,000
A cheque for GHC 6,600 drawn in respect of electricity bill had been incorrectly entered in the cash book as GHC 66,000
The bank statement showed banker’s charges totalling GHC 136,000; these had not been entered in the cash book.
A cheque for GHC 10,000 paid to a supplier had been correctly entered in the cash book but debited by the bank as GHC 1,000.
Cheques payment in favour of Amofa Brothers totalling GHC 4,500 had been correctly recorded in the bank statement , but included in the cash book payments as GHC 5,400

Required;

Prepare the cash book and show the original balance and the adjusted balance
Prepare a bank reconciliation statement as on 30^th June, 2007.

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