Question
In early August Company Axes received a bank statement which showed a balance of $55,502 as at 31st July. However, its own record showed a
In early August Company Axes received a bank statement which showed a balance of $55,502 as at 31st July. However, its own record showed a balance of $55,597 on the same date. The following differences are identified: (i) Deposits amounting to $1,200 were not in the bank statement; (ii) Two cheques were sent to suppliers, but yet to be accounted for by the bank. The cheques details were as follows: Cheque no:6661 dated July 20 $390 Cheque no:6662 dated July 27 $570 (iii) The bank imposed a service charge of $65 (iv) A cheque no 6666 issued on July 24 for water bill amounting to $3,350 was wrongly entered in the cash payment journal as $3,530. The amount was correctly shown as $3,350 in the bank statement. (v) A check amounting to $120 was received from customer ABC on July 15 and deposited a day after. However, due to insufficient funds in Mr. ABCs account, the bank informed the Company Axes that the dishonoured cheque had been debited to Company Axes. Show the Bank Reconciliation Statement for Company Axes. Q2 Weave Company received a bank statement for the month of August. The bank statement showed the following information: Balance 1 August $68,326 Deposits 45,300 Cheques processed (63,222) Service charges (50) Monthly deposit into saving account directly (26,120) Deducted by bank from account (780) Balance, 31st August $49,574 Weave Cos general ledger account had a balance of $78,304 at the end of August. (i) Deposits shown in the general ledger account but not in the bank amounting to $8,200; (ii) all cheques written by the company were processed by the bank except for those totaling $8,420; (iii) A $2,000 cheque to a supplier correctly recorded by the bank but was incorrectly recorded by the company as $200 credit to cash. Required: 1. Prepare a bank reconciliation statement for the month of August. 2. Prepare the necessary journal entries at the end of August to adjust the general ledger cash account.
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