Hoddles' cash book on 30 June showed a balance due to his bank of 1,210 on his
Question:
Hoddles' cash book on 30 June showed a balance due to his bank of
£1,210 on his No. 1 account, and a balance of £706 overdrawn appeared on his bank statement. On investigation you find
(i) Cheques drawn amounting to £420 had not been presented to the bank for payment.
(ii) Cheques, £360, entered in the cash book as paid into the bank, had not been credited by the bank.
(iii) The receipts side of the cash book had been undercast by £100.
(iv) Bank charges of £76 entered on the bank statement had not been entered in the cash book.
(v) A cheque for £520 drawn on the No. 1 account had been charged by the bank in error to the No. 2 account.
(vi) A dividend of £30 paid direct to the bank had not been entered in the cash book.
(vii) A cheque for £70 paid into the bank had been dishonoured and shown as such by the bank but no entry of dishonour had been made in the cash book.
(viii) A cheque drawn for £64 had been entered in the cash book in error as £46.
(ix) A cheque for £42, drawn by another customer of the same name , had been charged to Hoddles' bank account in error.
Required:
(a) Show the appropriate adjustments to be made in the cash book.
(b) Prepare a bank reconciliation statement for the No. 1 account.
Step by Step Answer: