NSC Accounting Bank reconciliation: BANK RECONCILIATION

The informa

Question

BANK RECONCILIATION

The information relates to Mango Traders for June 2023. The business uses the official bank statement which is received on the 26th of each month.

REQUIRED:

1.1.1 Calculate the following on 30 June 2023:

- Correct totals for the Cash Journals. Use the table provided in the ANSWER BOOK.
- Bank Account balance in the General Ledger of the business.

1.1.2 Prepare the Bank Reconciliation Statement on 30 June 2023.

1.1.3 Explain TWO strategies that the business can use to address the problem of missing cash.

INFORMATION:

A. The Bank Reconciliation Statement on 31 May 2023 showed the following:

Favourable balance on the Bank Statement R27 600
Outstanding deposits:
 - 18 May 2023 30 000 
 - 30 May 2023 18 200

Outstanding EFTs:
 - EFT 816 (to Ace Stationers) 7 400
 - EFT 817 (to Spark Wholesalers) 19 300

Favourable balance on the Bank Account in the Ledger 49 100

NOTE: The cashier reported that the cash to be deposited on 18 May was stolen while she was on her way to the bank. This amount must be written off.

B. Cash journal totals on 30 June 2023 before receiving the Bank Statement:

Cash Receipts Journal R81 300
Cash Payments Journal R80 620

C. Extract from the June Bank Statement:

Details

- Ace Stationers (EFT 816) 4 700
- Spark Wholesalers 19 300
- BK Builders (EFT 792) 6 200
- Deposit (30 May 2023) 18 200
- Cash deposit fee
- Direct deposit: G Glen 14 600
- VX Garage (EFT 818) 3 780
- Interest 240
- Transaction fees 540
- Transaction fees 540

- EFT 816 (to Ace Stationers) is correct on the Bank Statement.
- EFT 792 (to BK Builders) was incorrectly recorded in the June Cash Receipts Journal (CRJ).
- The direct deposit by G Glen was for monthly rent. 
- EFT 818 (to VX Garage) was for repairs to the company vehicle.
- The owner neglected to submit the transaction record slip to the bookkeeper. No entry was made in the books.
- The monthly transaction fees were duplicated on the bank statement.

D. Entries in the Cash Journals for June 2023 that do not agree with the June Bank Statement:

- Deposit on 27 June: R31 500
- R49 700
- EFT 945: R13 300

1.2 CREDITORS' RECONCILIATION

The information relates to SEB Traders for August 2023.

REQUIRED:

1.2.1 Taking into account the errors and omissions, calculate the correct balance for the Creditors' Control Account and the Creditors' List.

1.2.2 SEB Traders intend settling the account of Phuto Wholesalers on
31 August 2023. Calculate the amount due to them.

A. Balances and totals on 31 August 2023 (before correcting the errors and omissions)

- Creditors' Control Account balance R175 940
- Creditors' List total in the Creditors' Ledger R186 350

B. Errors or omissions:

(i) The total of the Creditors' Allowances Journal (CAJ) was understated by R3 600.

(ii) A payment of R14 250 made to Phuto Wholesalers was in error posted as R15 240 to the Creditors' Ledger Account, posting to the General Ledger was correct.

(iii) An invoice received from Planet Suppliers, R9 540, and recorded in the Creditors' Journal (CJ), was posted in the account of Phuto Wholesalers in the Creditors' Ledger.

(iv) Goods returned to Mish Dealers, R7 500, and recorded in the Creditors' Journal, was not entered in the Creditors' Ledger.

(v) SEB Traders recorded a payment of R13 280 from Arial Suppliers in the CJ after deducting a trade discount of 20%. However, Arial Suppliers's account reflected the discount on account, 10% only.

BANK RECONCILIATION The information relates to Mango Traders for June 2023 - NSC Accounting - Question 1 - 2023 - Paper 2

Worked Solution & Example Answer:BANK RECONCILIATION The information relates to Mango Traders for June 2023 - NSC Accounting - Question 1 - 2023 - Paper 2

Explain TWO strategies that the business can use to address the problem of missing cash

Join the NSC students using SimpleStudy...