Good day,
Please could you assist me.
If you look at the detail attached, and specifically to question b) Prepare the bank account in the general ledger of TWIT Traders.
In the suggested solution the balance b/d is R19 800 and the Balance c/d is R19 800.
How is this amount calculated?
2 FAC1502 OCTOBER/NOVEMBER 2019 QUESTION 1 (25 marks)(30 minutes) Commence this question on a new (separate) page. The bookkeeper of TWIT Traders provides you with the following information for June 2019 1 The bank statement had a favourable balance of R43 000 at 30 June 2019 2 The bank account in the general ledger had an unfavourable balance of R20 600 at 30 June 2019 3 The cash receipts journal had a total of R87 000 and the cash payments journal had a total of R56 000 at 30 June 2019 4 The bookkeeper of TWIT Traders compared the current month's bank statement with the cash journals and noted the following Mr T Maloy, a client of TWIT Traders, made a direct deposit of R6 700 into the business bank account Bank charges for the month was R250 Interest on a credit balance, R150 Mrs K Chetty's, a client of TWIT Traders, cheque of R1 500 was dishonoured by the bank The following debit orders appeared on the current month's bank statement Debit order for water and electricity, R4 000 Debit order for insurance, R2 200 Cheque no 675 for R1 000 was issued by TWAT Traders and it was incorrectly debited to TWIT Traders' account by the bank Miss S Conrad, a tenant of TWIT Traders, deposited R5 500 directly into the business bank account 5 The current month's bank statement reflected the following entries, which appeared on the previous month's bank reconciliation statement A deposit of R15 000 Cheque no 636 and 641 which were considered as outstanding cheques in the previous month's bank reconciliation are now presented for payment 6 The cash receipts journal reflected two deposits of R6 000 each, which did not appear on the current month's bank statement 7 The following cheques were issued in June 2019 but were not yet presented for payment cheque no 653 R 19 917 cheque no 654 R 8 742 cheque no 655 R 7 541 8 A cheque for R5 000 was issued to Jessie's Children's Centre on 24 November 2018 as a donation for the annual Christmas party The cheque was not cashed as yet by Jessie's Children's CentreFAC1502 OCT/NOV 2019 SUGGESTED SOLUTIONS QUESTION 1 a) Complete the cash receipts and cash payments journals of TWIT Traders, bank columns only, for June 2019 b) Prepare the bank account in the general ledger of TWIT Traders, properly balanced, at 30 June 2019 c) Prepare the correct bank reconciliation statement of TWIT Traders as at 30 June 2019. Begin with the balance as per bank statement a) Cash receipts journal Receipts Bank (R) A cash receipts journal is used to record all cash Subtotal 87 000 receipts of the business. All cash received by a Direct deposit - T Maloyi 6 700 business should be reported in the accounting Interest income 150 records. In a cash receipts journal, a debit is posted to cash in the amount of money received. An Rent income - S Conrad 5 500 additional posting must be made to balancing the Stale cheque - Jessie's Children Centre 5 000 transaction. 104 350 Cash payments journal A cash payment journal is a special journal that allows Payments Bank (R) you to record all cash payments - that is, all Subotal 56 000 transactions during which you spend funds. For Bank charges 250 example, if you paid cash to any of your creditors, you R/D cheque - K Chetty 1 500 would record it in your cash payment journal Water & electricity 4 000 Insurance 2 200 63 950 b) Bank account Date Details Amount Date Details Amount 30 June 2019 Cash receipts journal 104 350 01 June 2019 Balance b/d 20 600 30 June 2019 Credit losses raised 63 950 30 June 2019 Balance c/d 19 800 104 350 104 350 01 July 2019 Balance b/d 19 800
