Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Paul's cash book as at 30 April 2021 had a debit balance of $4,160. On the same date, the bank statement had a credit balance

image text in transcribed
image text in transcribed
Paul's cash book as at 30 April 2021 had a debit balance of $4,160. On the same date, the bank statement had a credit balance of $3,680. After checking the cash book against the bank statement, the following differences were discovered: 1. The bank had paid a standing order for rental of $2,550. 2. A cheque of $6,160 had not been presented for payment. 3. A deposit of $1,330 banked in on 29 April was only credited in the bank statement on 2 May 4. A cheque issued to a payable for $1,735 has been recorded in the cash book as $1,375. 5. The bank received by credit transfer an amount of $963 from Learning Ltd. 6. Bank charges of $45 had been charged by the bank but not recorded in the cash book. 5. 7. The bank statement shows that a cheque of $3,290 received from Tommy had been marked "dishonoured cheque" but no adjustment was made in the cash book. 8. A comparison between the cash book and the bank statement shows that a cheque payment of $28 for stationery has been omitted from the cash book but correctly recorded in the bank statement. Required: (a) Bring the cash book up to date. Calculate the updated balance on 30 April 2021 and state whether it is a debit or credit balance. (9 marks) (b) Prepare a statement to reconcile the difference between your amended cash book balance and the balance in the bank statement on 30 April 2021. (6 marks) (c) State the amount of the bank balance which would appear in Paul's Statement of Financial Position as at 30 April 2021. (1 mark) After being retrenched, Samson decided to set up a small service business at home. For each of the following transactions, determine if double entries are required. If required, write the account and amount to be debited and credited. If not required, just indicate as "No entries required". (a) Samson invested $20,000 into his new service business "Samsonite Services", and a bank account in this name was opened. He also contributed his own computer worth $1,040 to the business. (b) To furnish his new office, an office desk and a few office chairs were bought from PH Ltd using a business cheque of $960 He also used his own cash to buy a bed from PH Ltd that costs $990 for his mother. (d) Billed client Delia $3,150 for service rendered. (e) One of the office chairs bought from PH Ltd was defective and the business promptly returned it. A cash refund of $200 was received. (1) After much persuasion, Samson's father agreed to lend $5,000 to the business and issued a cheque for it. (g) Bought a printer costing $680 from PH Ltd. Cash of $68 was paid as a deposit, with the remainder to be paid by the end of the month. (h) Received cash of $520 for service rendered to a client. (1) Issued a cheque to pay office rent of $1,470. 6) Samson took $38 cash from the office to buy a bouquet of flowers for his wife. (k) Received a cheque for amount owing from Delia. (1) Paid the amount owing to PH Ltd in cheque. (m) Samson won the first prize in a lucky draw and received $38,888 in prize money. (n) Samson took $8,000 from his prize money to buy a diamond ring for his wife. (0) With a personal cheque of $5,100, Samson paid back the $5,000 loan from his father together with an interest of $100. (p) Banked in all cash

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Accounting

Authors: Floyd A. Beams, Robin P. Clement, Suzanne H. Lowensohn, Joseph H. Anthony

9th Edition

0131851225, 978-0131851221

More Books

Students also viewed these Accounting questions

Question

Excel caculation on cascade mental health clinic

Answered: 1 week ago

Question

=+ Where would most corporations like the balance to fall?

Answered: 1 week ago