Cliff Tools is an online business selling D$-$I$-$Y products to the public. The bookkeeper left the

business in May $2024.$ The new bookkeeper, Mrs Naidoo, started on $01$ July $2024.$ The June $2024$

reconciliation was prepared by Miss Baines, the Social Media manager, who did accounting at

school a while ago.

Q$\mathrm{.}2\mathrm{.}1$ Mrs Naidoo is now preparing the July $2024$ bank reconciliation and reviewed

the June $2024$ reconciliation. She noted that some of the reconciling items on

the reconciliation did not appear to be correct. For example, the outstanding

deposit DS #$5611$ was deposited on $20$ June $2024$ but was recorded incorrectly

as R$21000$ instead of R$21400$ in the cash book receipts.

BANK RECONCILIATION STATEMENT FOR JUNE $2024$

R

Balance per bank statement $($overdraft$)11500$

Items in cash journals not on bank statement:

Outstanding deposits: DS #$5621(30/6/2024)4500$

Outstanding deposit: DS#$5611(20/6/2024)21000$

Outstanding payments: EFT EDD$15478(2600)$

Stop order: Santam Insurance $($on bank statement but not

in cash book payments journal$)$

$1520$

Correction of bank charges not in the cash book journals $620$

Deposit not in cash book journals $(20$ June $2024)(21400)$

Balance per Bank account $15140?$

REQUIRED:

Q$\mathrm{.}2\mathrm{.}1\mathrm{.}1$ Name the two types of reconciling differences that are found on a bank

reconciliation statement.

$(2)$

Q$\mathrm{.}2\mathrm{.}1\mathrm{.}2$ Was Miss Baines correct to show the bank charges as a reconciling item on the

June bank reconciliation statement? Give a reason for your answer.

$(3)$

$242024$

$$ The Independent Institute of Education $($Pty$)$ Ltd $2024$

Page $4$ of $12$

Q$\mathrm{.}2\mathrm{.}1\mathrm{.}3$ How should Mrs Naidoo adjust for the error relating to Deposit DS#$5611$ on the

above June $2024$ bank reconciliation?

$(2)$

Q$\mathrm{.}2\mathrm{.}1\mathrm{.}4$ Review the June $2024$ reconciliation provided above and then prepare the

corrected June $2024$ bank reconciliation $($you can assume that the balance per

the bank statement is the correct amount$).$

$(3(1)/(2))$

Q$\mathrm{.}2\mathrm{.}1\mathrm{.}5$ What will the balance brought down in the general ledger bank account be on

$01$ July $2024?$ Is this a favourable or unfavourable balance?

$(2)$

Q$\mathrm{.}2\mathrm{.}2$ Mrs Naidoo has compared the corrected June $2024$ bank reconciliation

statement and the July $2024$ cash journals to the July $2024$ bank statement. She

has noted the following:

$1.$ The balance per the bank statement at $31$ July $2024$ is R$11995$

$($favourable$).$

$2.$ The totals of the cash books for July $2024,$ before any adjustments, were:

$$ Cash book receipts: R$185960$

$$ Cash book payments: R$149680$

$3.$ Deposit DS#$5621$ and EFT EDD$15478$ appear on the July $2024$ bank

statement.

$4.$ An EFT payment to a creditor $($Mighty Tools$)$ had been recorded in the

cash book payments as R$35700$ instead of R$35100.$ The bank statement

reflected the correct amount.

$5.$ A deposit of R$7100$ on the July bank statement does not appear in Cliff

Tools$$ cash journals. Mrs Naidoo queried this with the bank who informed

her that the deposit had been made into the incorrect bank account and

would be reversed in August $2024.$

$6.$ A transfer of R$10000$ to the fixed deposit savings account on $10$ July had

been recorded in the cash book receipts.

$7.$ The following entries on the July $2024$ bank statement do not appear in

the July cash journals:

$$ Bank charges of R$590$

$$ Debit order for Metro Fibre for internet charges of R$1200$

$$ Stop order: Santam Insurance for R$1520$

$$ Fixed deposit interest deposited into the current bank account of

R$325.$

$$ Direct deposit by a debtor, M$.$ Biyela, for R$14700.$

$8.$ The following transactions in the July cash journals did not appear in the

July bank statement:

$$ Deposits: $31/07/2024$: R$19700$

$$ Payments: $31/07/2024$: R$5600$

Required:

Q$\mathrm{.}2\mathrm{.}2\mathrm{.}1$ Record any differences identified in the July $2024$ bank reconciliation process in

the supplementary cash book receipts and payments with columns for details

and amount. Begin with the totals before any amendments.

$(11(1)/(2))$

Q$\mathrm{.}2\mathrm{.}2\mathrm{.}2$ Open, post to and balance the July $2024$ bank account in the general ledger. $(4)$

Q$\mathrm{.}2\mathrm{.}2\mathrm{.}3$ Prepare the bank reconciliation statement as at $31$ July $2024.$