Question
Nose Mask Ltd (Nose Mask) is preparing his bank reconciliation at 31st May 2019. His bank statement balance failed to agree with the cash book
Nose Mask Ltd (Nose Mask) is preparing his bank reconciliation at 31st May 2019. His bank statement balance failed to agree with the cash book balance. His bank statement shows a balance of GH684 cash at the bank. After investigation the following were revealed; a. The following cheques have not yet been presented at the bank. These are: Cheque No. GH 956784........1,875 956892........978 958452.........1,407 958541.........366 958668..........261 Total Amount = 4,887 b. Cheque number 958602 was incorrectly recorded in Nose Mask's cash book as GH1,140. The cheque was correctly debited on the bank statement on 2nd May as GH1,005. c. Bank charges of GH1,149 were debited by the bank on 4th May. d. A customer's cheque for GH960 was returned by Nose Mask's bank in May as the customer had insufficient funds in his account. Nose Mask has not recorded the return of the cheque in his records. e. The bank has incorrectly credited Nose Mask's account with interest of GH660. This is interest on a deposit account held by Nose Mask personally. The bank had not corrected the error by 31st May. f. A lodgement of GH2,550 entered in Nose Mask's cash book on 31st May was credited on the bank statement on 3rd June. g. Cheque number 956784 was lost in the post and was cancelled. Nose Mask has not recorded the cancellation of the cheque. Required: (i) Show Nose Mask's general ledger bank account including the necessary correcting entries.
(ii) Prepare a reconciliation of the bank statement balance to the corrected general ledger balance. (iii) Indicate how the bank balance will be reported in Nose Mask's final account
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