120

Forerunner Sdn Bhd20191231

1. 123163,487.4090,183.60
2. Check No. 2546 for RM2,168.40 and Check No. 2550 for RM780, both written and entered in the accounting records in December, are not among the cleared cheques. Two cheques, No. 2510 for RM4,578 and No. 2499 for RM741, were outstanding on the most recent 30 November 2019 reconciliation. Check No. 2510 is listed with the December cleared cheques, but Check No. 2499 is not.
3. When the December cheques are compared with entries in the accounting records, it is found that Check No. 2567 had been correctly drawn for RM4,870 to pay for office supplies but was erroneously entered in the accounting records as RM4,906.
4. Two debit memoranda are enclosed with the statement and are unrecorded at the time of the reconciliation. One debit memorandum is for RM1,499 and dealt with as an NSF check for RM1,464 received from a customer, Fire Industries, in payment of its account. The bank assessed a RM35 fee for processing it. The second debit memorandum is a RM158 charge for cheque printing. Forerunner did not record these transactions before receiving the statement.
5. A credit memorandum indicates that the bank collected RM40,000 cash on a note receivable for the company, deducted a RM40 collection fee, and credited the balance to the Companys Cash account. Forerunner did not record this transaction before receiving the statement.
6. Forerunners 31 December daily cash receipts of RM15,332.20 were placed in the banks night depository on that date, but do not appear on December 31 bank statement.

Required:

1. Prepare a bank reconciliation to calculate the companys adjusted cash balance at 31, December 2019.

(7 marks)

2. Prepare adjusting entries as at 31 December 2019 (narration is to be ignored)

(3 marks)