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The following information is available after the CashBook of T Stores was compared with their Bank Statement at 28February 2018.
Information
1. The Cash Book showed an overdraft of GHS10,100.
2. The Bank Statement showed a debit balance of GHS10,568.
3. The deposit of GHS7,654 does not appear on the BankStatement.
4. Cheques not yet presented for payment:
Nr. 511 GHS805
Nr. 516 GHS690
5. The bank recorded the following in the current bank account of TStores:
Credit card levy GHS150
Service fee GHS243
Interest on overdraft GHS163
6. A cheque for GHS260 received from P. Peters was dishonoured bythe bank. Discount allowed on this cheque was GHS30.
7. A payment by a debtor, D. Sunshine, for GHS3,000 appears in theBank Statement and not in the Cash Book.
8. The Bank Statement showed a debit order for GHS693 in favour ofDeadsure for an insurance premium.
9. T. Strong, a tenant, deposited his monthly rent directly intothe bank account, GHS4,200.

You are required to:

(i) Make supplementary entries in Cash Book of TStores on 28 February 2018.

(ii) Draw up the Bank Reconciliation Statement on 28February 2018.

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Keith Leannon
Keith LeannonLv2
28 Sep 2019

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The financial year of John Company, a sole trader, ends on 30 September 2017. On 30 September 2017, his bank account in the ledger showed a debit balance of $59,204. This did not agree with the balance as shown on the bank statement.

An investigation of the records disclosed the following:


i) Direct debit of $7,100 to the electricity company and overdraft interest of $600 had been omitted in the company’s bank account.
ii) A cheque for $17,000 from a customer was wrongly recorded as $17,800.
iii) A cheque for $16,000 received from a customer had been recorded in the bank account on 13 September 2017. It was subsequently dishonoured and returned by the bank. This transaction had not yet been recorded in the books.
iv) Cheques issued to suppliers amounting to $10,000 had not yet been presented to the bank for payment.
v) The bank statement showed that a customer had settled his debt of $45,300 to the firm by paying directly into the bank. No entries have yet been made in the company’s bank account.
vi) A cheque for $46,000 was banked on 30 September 2017 but recorded by the bank on 3 October 2017.
vii) The bank statement revealed that the bank had mistakenly deducted a bank charge of $1,000 on 28 September 2017.

Required
a) Prepare a bank reconciliation statement for Steve Company as at 30 September 2017.
b) Explain the importance of preparing a bank reconciliation statement.

The bank reconciliation prepared by Gatz Company on May 31,2017, appeared as follows:

GATZ COMPANY
Bank Reconciliation
May 31, 2017
Bank statementbalance $9,264.35 Book balance $19,429.00
Add:
Deposit of May 31 in transit 949.00
$10,213.35
Deduct: Deduct:
Outstanding cheques: NSF cheque plusservice
#876 $636.00 charge $11,530.65
#882 1,744.00 2,380.00 Bank servicecharge 65.00 11,595.65
Adjusted bankbalance $7,833.35
 Adjusted bookbalance $7,833.35


The Cash account in the General Ledger appeared as follows on June30 (Gatz uses only a General Journal to recordtransactions):

Cash Acct. No.101
Date Explanation PR Debit Credit Balance
2017
May 31 Balance 7,833.35
June 1 Cheque #883 GJ16 1,847.00 5,986.35
1 Cheque #884 GJ16 107.00 5,879.35
3 Cheque #885 GJ16 618.00 5,261.35
4 Cheque #886 GJ16 1,917.00 3,344.35
9 Deposit GJ16 4,579.00 7,923.35
12 Cheque #887 GJ16 425.15 7,498.20
12 Cheque #888 GJ16 3,138.00 4,360.20
12 Cheque #889 GJ16 936.00 3,424.20
18 Deposit GJ16 3,879.00 7,303.20
20 Cheque #890 GJ16 2,537.00 4,766.20
21 Cheque #891 GJ16 1,406.24 3,359.96
24 Cheque #892 GJ16 2,492.00 867.96
26 Cheque #893 GJ16 71.00 796.96
29 Deposit GJ16 1,745.00 2,541.96


The following bank statement is available for June:

Bank Statement
To: GatzCompany June 30, 2017
Bank of Montreal
Cheques/Charges Deposits/Credits Balance
05/31 9,264.35
#884 06/01 107.00 06/01 949.00 10,106.35
#883 06/04 1,847.00 8,259.35
#876 06/09 636.00 06/09 4,579.00 12,202.35
#889 06/12 936.00 11,266.35
#882 06/14 1,744.00 9,522.35
#887 06/18 245.15 06/18 3,879.00 13,156.20
#885 06/20 618.00 12,538.20
#891 06/21 1,046.24 11,491.96
#886 06/29 1,917.00 9,574.96
SC 06/30 72.00 06/30 9,502.96
NSF = Not Sufficient
Funds		 SC = Service
Charge		 PMT = Principal
Payment		 INT = Interest


Required:
a. Prepare a bank reconciliation at June 30, 2017. Assumethat any errors made were by the book keeper (cheque #887 was foroffice supplies; cheque #891 was for utilities expense).(Round the final answers to the nearest cent.)

GATZ COMPANY
Bank Reconciliation
June 30, 2017
Bank Statement Company's Books
Bankstatement balance Bookbalance
Add: Add:
$0.00 $0.00
Deduct: Deduct:
Outstanding cheques:
0.00
Adjusted bank balance Adjusted book balance

b. Prepare the necessary entries resulting fromthe bank reconciliation.

Journal entry worksheet

Record to account for error in Cheque #887.

Note: Enter debits before credits.

Date General Journal Debit Credit
Jun 30

Journal entry worksheet

Record to account for error in Cheque #891.

Note: Enter debits before credits.

Date General Journal Debit Credit
Jun 30

Journal entry worksheet

Record bank service charges for June.

Note: Enter debits before credits.

Date General Journal Debit Credit
Jun 30

The bank reconciliation prepared by Gemma Tours on March 31,2017, appeared as follows:

Gemma Tours
Bank Reconciliation
March 31, 2017
Bank statementbalance $15,500 Book balance $34,257
Add:
Deposit of March 31 in transit 22,044
$37,544
Deduct:
Outstanding cheques:
#79 $1,306
#84 1,981 3,287
Adjusted bankbalance $34,257
 Adjusted bookbalance $34,257


The Cash account in the General Ledger appeared as follows on April30:

Cash Acct. No.101
Date Explanation PR Debit Credit Balance
2017
March 31 Balance 34,257.00
April 30 CR11 35,645.00 69,902.00
30 CD14 45,533.00 24,369.00

A list of deposits made and cheques written during April, takenfrom the Cash Receipts Journal and Cash Disbursements Journal, isshown below:

Deposits Made
April 7 $14,865.00
13 892.00
18 14,272.00
23 994.00
27 1,981.00
30 2,641.00
Total April CashReceipts $35,645.00


Cheques Written
No.91 $ 1,256
92 5,475
93 2,590
94 3,613
95 3,033
96 1,895
97 8,862
98 3,033
99 8,982
100 6,794
Total April CashDisbursements $45,533


The following bank statement is available for April: (Note: Thebank deposits interest into the bank account at the end of everymonth.)

Bank Statement
To:Gemma Tours April 30, 2017
Bank of Montreal
Cheques/Charges Deposits/Credits Balance
15,500
#93 04/02 2,509 04/03 22,044 35,035
#92 04/07 5,475 04/07 14,865 44,425
#84 04/13 1,981 04/13 892 43,336
NSF 04/18 6,876 04/18 14,272 50,732
#95 04/23 3,033 04/23 994 48,693
#99 04/27 8,982 04/27 1,981 41,692
#96 04/30 1,895 04/30 2,641 42,438
#97 04/30 8,862 INT 46 33,622
#94 04/30 3,613 30,009
PMT 04/30 9,861 20,148
INT 04/30 35 20,113
SC 04/30 55 20,058
NSF = NotSufficient
Funds		 SC =Service
Charge		 PMT =Principal
Payment		 INT =Interest


In reviewing cheques returned by the bank, the bookkeeperdiscovered that cheque #93, for delivery expense, was recorded inthe Cash Disbursements Journal incorrectly as $2,590. The NSFcheque was that of customer Laura Clark, deposited in April.

Required:
a. Prepare a bank reconciliation at April 30.

GEMMA TOURS
Bank Reconciliation
April 30, 2017
Bank Statement Company's Books
Bankstatement balance Bookbalance
Add: Add:
0
0 0
Deduct: Deduct:
Outstanding cheques:
0 0
Adjusted bank balance Adjusted book balance


b. Prepare the necessary journal entries tobring the General Ledger Cash account into agreement with theadjusted balance on the bank reconciliation.

Journal entry worksheet

Record interest earned.

Note: Enter debits before credits.

Date General Journal Debit Credit
Apr 30

Journal entry worksheet

Record to account for error in Cheque #93.

Note: Enter debits before credits.

Date General Journal Debit Credit
Apr 30

Journal entry worksheet

Record to reinstate customer account.

Note: Enter debits before credits.

Date General Journal Debit Credit
Apr 30

Journal entry worksheet

Record April loan payment.

Note: Enter debits before credits.

Date General Journal Debit Credit
Apr 30

Journal entry worksheet

Record April interest expense.

Note: Enter debits before credits.

Date General Journal Debit Credit
Apr 30

Journal entry worksheet

Record April bank charges.

Note: Enter debits before credits.

Date General Journal Debit Credit
Apr 30

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