Q2

(23 marks) The following information became available after the Cash Books of Sunshine Stores, a clothing retailer, were compared with their Bank Statement at 28 Febru- ary 2021: a) The cash books showed an overdraft of R20 300 at 28 February 2021. b) The Bank Statement showed an unfavourable balance of R16 550 at 28 Febru- ary 2021 c) The following item appeared on the bank reconciliation statement as at 31 January 2021 but not on the bank statement for February 2021 Cheque no 436, for R 1 230 issued to a creditor, Western Wear on 7 AU- gust 2020. The cheque has become stale and was therefore cancelled. d) Cheques not yet presented for payment, that appear in the cash payments journal for February 2021 but not on the bank statement for the same month Nr. 981 dated 28 February for R4 805 Nr. 956 dated 28 February for R3 560 e) A deposit of R3 650 that appears in the cash receipts journal was made on the 27 February 2021, but does not appear on the Bank Statement. When enquir- ing at the bank, it was determined that the money was incorrectly deposited into the account of another client of the bank. f) As per the bank statement for February 2021, the bank recorded the following in the current bank account of Sunshine Stores: Credit card levy R150 Service fee R243 O Interest on overdraft of R437 g) A cheque for R1 200 received from a debtor, F. Casillas was dishonoured by the bank and returned marked R/D. h) A payment by a debtor, C. Radebe, for R3 000 appears in the Bank Statement and not in the Cash Receipts Journal. i) The bank statement for February 2021 showed a debit order for R715 in favour of Villagesure for an insurance premium. )) A cheque for R7 500, issued during February 2021 as payment for rent was recorded as R750 in the cash payments journal. This error must still be cor- rected k) The bank statement for February 2021 showed a deposit of R4 300 that was erroneously made by another client of the bank. REQUIRED: 2.1) Create supplementary entries in Cash Receipts Book and Cash Payments Book of Sunshine Stores on 28 February 2021 by taking into account transactions (a) to (k) where applicable. Only add totals for the bank columns in the Cash Receipts Book and Cash Payments Book as per the answer book provided. (10 Marks) 2.2) Prepare the bank reconciliation statement of Sunshine Stores as at 28 February 2021 (13 Marks) Aligns to SAICA competencies: 11-1.4 Develops reliable information Establishes processes to reconcile or compare balances to exter- nal party records, e.g. banks, customers, suppliers, debtors Reviews and analyses information and investigates possible signs of errors, fraud and illegal acts, e.g. inconsistency in data, lack of completeness, unexpected trends