Question 1

Paul Consulting is trying to prepare its bank reconciliation statement. For this purpose, the following data is available:

The balances as per two books as at 30 September 2022 are as follows:

Bank Statement Balance $28 507 (Credit)

Cash at Bank Account Balance $27 271 (Debit)

The receipts of $1 092 have not been deposited.

The given data reveals that the cheques of $2 081 were issued but not presented.

A deposit from another customer for $450 was incorrectly credited into the bank account of Paul Consulting.

A cheque for the amount of $188 was returned marked dishonoured.

Bank charges of $15 appeared in the bank statement.

Required: Prepare a bank reconciliation for Paul Consulting at 30 September 2022.

Question 2

The following information relates to the business of David & Sons Company. The financial year of the company ends at 30 June 2022.

Opening balance of Account Receivables $22 200

Opening balance of the Allowances for Doubtful Debts 2 820

Closing Balance of Account Receivables 28 860

Net credit sales during the year 78 000

During the year, $2 160 of account receivables were written off as bad debts. David & Sons Company uses the net credit sales method to estimate doubtful debts. It is estimated that three per cent of the net credit sales will become uncollectable. Ignore GST.

Required:

Prepare the following accounts (T-account) at the end of 2022

Account Receivables

Allowances for Doubtful Debts

Show how the above information appears in the Income Statement and the Balance Sheet of the company at the end of the financial year