Question 4

Lima Enterprise had a cash book balance of RM11,000 as at 30 June 2020. On receiving the bank statement which showed bank balance of RM13,463, the owner Puan Limah discovered the following differences between the cash book (bank column) and the bank statement.

1. Cheque payments RM3,138 entered in the cash book but not yet been presented to the bank.
2. A deposit of RM425 paid into the bank on 28 June 2020 had not yet appeared on the bank statement.
3. Cheques for RM300 and RM250 received from customers were returned by the bank as dishonoured, but no entries concerning these events have been made in the cash book.
4. The bank had recorded a credit transfer amounting to RM1,500 for the business. The business had yet to record this receipt into its cash book.
5. Cheques amounting to RM9,000 had been sent to suppliers and entered in the cash book during June 2020 but had not yet been presented to the bank.
6. The accounts staff erroneously recorded a payment to Pluto Trading for RM2,000 instead of RM12,200. The bank cleared the cheque for the correct amount of RM12,200.
7. The items below shown on bank statements but have not been entered in the cash book:
   1. Bank charges, RM100
   2. Standing order- hire purchase repayments on purchase of motor car, RM400.

Dividend received on investment, RM500.

Required:

a).Adjust and update the bank account. Show the adjustments that should be made. (8 marks)

b)Prepare a bank reconciliation statement as at 30^th June 2020. (6 marks)