Bank Reconciliation Class demonstration exercise

As accountant for William Associates, you are required to perform a bank reconciliation at the end of June 2013. The bank reconciliation statement for the previous month is set out below:

		Bank Reconciliation Statement
		As at 31 May 2015
		Balance as per bank statement		$ 879.75	Cr
		Add: Outstanding deposit		$ 390.00
				$ 1,269.75
		Less: Unpresented cheque no.	1008	$ 161.60
		Balance as per Cash at Bank account		$ 1,108.15	Dr

Abridged cash receipts and cash payments journals before finalisation and posting are:

		Cash Receipts Journal
	Date	Account		Cash at bank
	2015
	June
	2	N Burney		$ 142.55
	5	Sales		$ 240.55
	9	R Denis		$ 310.25
	12	Sales		$ 187.85
	16	Sales		$ 310.25
	22	Rush Ltd		$ 380.65
	27	Sales		$ 75.45
	29	Sales		$ 354.35
	30	Sales		$ 87.55
		Sales		$ 65.45
		Sales		$ 241.34
				$ 2,396.24

	Cash Payments Journal
	Date	Account	Cheque no.	Cash at Bank
	2015
	June
	2	Stationary	1010	$ 57.70
	5	Advertising	1012	$ 180.90
		Wages and salaries	1014	$ 405.15
		Petty cash	1015	$ 23.55
	9	Roy & Sons	1016	$ 63.36
		Wages and salaries	1018	$ 402.50
	16	Sales commission	1020	$ 33.82
	17	Shaun Ltd	1021	$ 105.51
	25	Wages and salaries	1024	$ 437.35
	26	T Garner	1025	$ 42.15
		Central Groceries	1026	$ 46.86
		Donation Blue Cross	1027	$ 11.00
	28	Roy & Sons	1028	$ 85.14
	30	Freight inwards	1029	$ 24.25
		N. Brice	1030	$ 90.82
				$ 2,010.06

N.B. A new book keeper has prepared the accounts and made a number of mistakes. Therefore the folllowing checques are cancelled: 1011, 1013, 1017, 1019, 1022 and 1023.

	BANK STATEMENT
	DATE	PARTICULARS	DEBIT	CREDIT	BALANCE
	2015
	June
	1	Balance			$ 879.75	Cr
	2	1010	$ 57.70		$ 822.05	Cr
				$ 390.00	$ 1,212.05	Cr
				$ 142.55	$ 1,354.60	Cr
	5	1008	$ 161.60		$ 1,193.00	Cr
				$ 240.55	$ 1,433.55	Cr
	7	1012	$ 180.90		$ 1,252.65	Cr
		1014	$ 450.15		$ 802.50	Cr
		1015	$ 23.55		$ 778.95	Cr
				$ 310.25	$ 1,089.20	Cr
	12	1016	$ 63.36		$ 1,025.84	Cr
		1018	$ 402.50		$ 623.34	Cr
				$ 187.85	$ 811.19	Cr
		1020	$ 33.82		$ 777.37	Cr
	16			$ 310.25	$ 1,087.62	Cr
	22	1021	$ 105.51		$ 982.11	Cr
				$ 380.65	$ 1,362.76	Cr
		Direct payment to Myke	$ 400.00		$ 962.76	Cr
	27			$ 75.45	$ 1,038.21	Cr
	28	1024	$ 437.35		$ 600.86	Cr
		D Finley Returned cheque	$ 65.00		$ 535.86	Cr
	30	1025	$ 42.15		$ 493.71	Cr
		Bank fees	$ 50.00		$ 443.71	Cr
		1026	$ 46.86		$ 396.85	Cr
				$ 354.35	$ 751.20	Cr
		Govt. bond Interest		$ 235.00	$ 986.20	Cr

Additional information: Cheque no. 1014 for $405.15 is entered correctly in the Cash Payment Journal but appeared in the Bank Statement as $450.15.

Required:

1. Starting with the totals shown, complete the cash receipts and cash payments journals, amending or adding to them as necessary for the month of June.
2. Prepare the Cash at Bank ledger account showing the final balance at 30 June 2013.
3. Prepare the bank reconciliation statement as at 30 June 2013.

QUESTION 2 Petty cash Class Demo Exercise

On 1 July, Bill Ltd established a $500 petty cash fund. Cheque no. 653 was received by the petty cashier and duly cashed. On 31 July, the petty cash box contained the following cash and expense vouchers:

	Cash
	Expense vouchers
	Voucher no.		Date	Purpose	Amount
	36	July	7	Office supplies	$ 80.00
	37		10	Stationery	$ 98.00
	38		14	Parking ticket	$ 55.00
	39		19	Newspapers	$ 22.00
	40		23	Customer refund	$ 92.00
	41		26	Taxi fare	$ 75.00

Required:

1. Show the journal entries that was made to establish the petty cash fund in the Cash Payments Journal on 1 July.

2. Show the journal entries needed on 31 July to reimburse the petty cash fund (cheque no. 656 cash payments) in the Cash Payments Journal. All expenses other than Office Supplies, Stationery and Customer Refund should be charged to Sundry Expenses.

3. Assume that a decision was made to increase the petty cash fund to $600 from 1 August (cheque no. 658). Show the journal entries in the in the Cash Payments Journal to do so.

4. Prepare a petty cash book, with appropriate analysis columns similar to the one below, to incorporate the transactions of the fund shown above.

NOTE: Ignore GST