21 2021 Question 1 (Marks: 40) You have been provided with the following information from the books of Zebra Traders: Information from the Bank Reconciliation Statements on the 30th April 2021 R 17 200 8 500 28 500 Balance as per bank statement (Favourable) Add: Outstanding deposits: 10 April 2021 30 April 2021 : Less: Outstanding cheques 2001: Dated 10 October 2020 2651: Dated 27 April 2021 2691: Dated 10 May 2021 Balance as per bank account (Favourable) (2 220) (4 150) (11 330) 36 500 Cheque 2651 appeared on the bank statement for May 2021. Deposit on the 30th April appeared on the May 2021 bank statement. Cheque 2001 has to be cancelled as the charity organisation that it was given to no longer exists. The outstanding deposit of R8 500 was in respect of cash received from an outstanding debtor. This deposit has not appeared on the May 2021 bank statement and it has been discovered that this amount was recorded but it was never deposited. The owner has authorised that this amount be written off as a loss to the business. The owner has also undertaken to investigate who is responsible for this theft. A comparison of the May 2021 bank statement and the May 2021 cashbooks revealed the following: o o Bank charges of R530 were not recorded in the cashbooks. Cheque number 2712 issued to creditor Mr. Llon, appeared correctly in the bank statement as R5 630 but was incorrectly recorded in the Cashbook Payments as R6 530. A monthly stop order of R1 800 for insurance needs to be recorded in the cashbook. A dishonoured cheque for R2 355 appeared on the bank statement. This cheque was received from Miss H Yena, a debtor in settlement of her account of R2 400. o 0 The Independent Institute of Education (Pty) Ltd 2021 Page 2 of 8 21 2021 Interest of R480 received from the bank was not recorded in the cashbook. The following entries appeared in the cashbooks of Zebra Traders and not in the May Bank Statement: 0 Outstanding deposits: R17 300 on the 17th May R18 400 on the 31st May Cheques not yet presented for payment: 2785 for R6 500 dated 12th May 2021 2805 for R7 770 dated 25th June 2021 The bank statement balance as at 31st May 2021 is R20 815 favourable. The totals of the cashbooks before any adjustments: 0 Cashbook receipts R8 500 0 Cashbook payments R4 500 Q.1.1 (6) In your own words, explain the difference between an adjusting difference and a timing difference and provide an example of each. Q.1.2 (15%) Show the adjustments that would be required in the cashbooks by completing the following tables in your answer booklet: AMOUNT Subsidiary Cashbook Receipts DETAILS Total before adjustments Adjustments: Total receipts after adjustments The Independent Institute of Education (Pty) Ltd 2021 Page 3 of 8