Question 4

The bank statement for Ghina for the period ended 30 June 2020 was received. On investigation it emerged that the balance per the statement was different to the balance per the cash book. The cash book showed a debit balance of RM5, 900. On examination the following differences were found:

1. Cheques issued amounting to RM9,300 were still outstanding and did not go through the bank until July 2020.
2. A customer, who received a cash discount of 5% on his account of RM500, paid the company by cheque on 15 June 2020. The bookkeeper, in error, entered the gross amount in the cash book.
3. A deposit of RM1,000 paid into the bank on 29 June 2020 had not yet appeared on the bank statement.
4. Bank charges of RM150 were omitted from the cash book.
5. In March the company had entered into an agreement to pay its electricity bill by direct debit on the 28 of each month. The amount relating to June was RM100.No entries appeared for this in the cash book.
6. A cheque for RM90 had been lodged on 20 June .On 22 June this appeared on the debit side with the cheque being returned to the company as out of date. A new cheque has been requested from the customer.
7. Two customers paid amounts directly into the bank account by standing order on 28 June. The amounts were RM950 and RM1,300. No entries had been made in the cash book.
8. RM760 paid into the bank had been entered twice in the cash book.
9. A standing order to a charity for RM135 had not been entered in the cash book.
10. On 15 June the manager had given the bookkeeper a cheque for RM500 to lodge into his personal account. By mistake the bookkeeper lodged it to the business account and recorded it in the cash book.

After correcting the cash book and adjusting the balance on the bank statement, both balances reconciled.

Required:

1. Show the necessary adjustments in the cash book of Ghina highlighting the corrected balance at 30 June 2020.

(10 Marks)

2. Prepare a bank reconciliation at that date showing the balance per the bank statement.