1/ Provide two reasons why it is important for a business to have good internal control procedures over cash. (4 marks)

2/ You have received the bank statement for your company's (Prestige Auto Ltd) bank account for the period ending 30 June 2019 and need to reconcile it with the general ledger cash account. Your records show an ending balance for the month of $12,722.40 DR while the bank statement shows a credit ending balance of $12,367.16. The opening cash ledger account balance includes postings from the Cash Receipts and Cash Payments journal. The bank statement showed charges of $8 for service fees and paid $26.05 in interest. These items have not yet been recorded in the cash journals. All but three cheques written during the month were processed by the bank without incident during the month.

The three exceptions were: 1) Cheque #841 was correctly processed by the bank as $981.27 but was incorrectly recorded as $781.27 in the cash payments journal.

2) Cheque #853 for $64.57 had not yet been presented to the bank.

3) Cheque #855 for $683.46 had not yet been presented to the bank.

All but two of the deposits made during the month were processed by the bank without incident. The two exceptions were: 1) A customer cheque for $307.95, which had been deposited during the month, was dishonoured. 2) A deposit totaling $613.37 had not yet been processed by the bank.

Required: Use the templates provided on the next page of the paper:

(i) Prepare the Adjusted Cash at Bank ledger (in T-account format) showing the final balance on 30 June 2019. 7777 (7 Marks)

(ii)Have a bank reconciliation for Prestige Auto as at 30 June 2019. (7 Marks)