QUESTION

Mo Rom has been running his brandy distilling company for the last $2$ years, Mo$$s Rum. The business has a financial year end of $28$ February $2023.$

The bookkeeper of the business partially performed the bank reconciliation for the month ending February $2023$ before contracting COVID. Mo has approached you for assistance to complete the bank reconciliation and has provided you with the following information:

The bank balance as per the General Ledger reflected a favourable balance of R$143098,$ while the bank statement reflected a debit balance of R$55000.$

After performing the comparison between the Financial Records and the Bank Statement the following information was noted:

$1.$ Transactions recorded in the Financial Records but not on the Bank Statement

a$.$ A customer issued a EFT in favour of the business for R$185000.$ The amount was only banked on $2$ March $2023.$

b$.$ An amount of R$650$ was paid out of Mo$$s personal bank account for his gym membership. The amount was incorrect credited against the bank account of the business as entertainment.

c$.$ The following EFT payment orders were issued, correctly recorded in the financial records but have not been cleared by the bank:

i$.$ EFT $813$ issued to Waltons for the purchase of stationery for R$845,$ and

ii$.$ EFT $835$ issued to Telkom for telephone expenses incurred during February $2023$ for R$1340.$

$2.$ Transactions recorded in the Bank Statement but not in the Financial Records

a$.$ The following debit orders were noted:

i$.$ R$650$ Santam for insurance premium

ii$.$ R$3500$ Growth Point Properties in respect of Rental Space for the Distillery

iii. R$148$ Bank Charges

b$.$ The following EFT Payment orders which were issued during January $2023$ and properly recorded in the financial records for January $2023$ have been presented for payment with the bank:

i$.$ EFT $800$ R$450$ issued to Telkom for January $2023$ telephone expenses.

ii$.$ EFT $805$ R$1670$ was issued to Yeast and All for the purchase of yeast during January $2023.$

c$.$ Payment of R $11500$ was incorrectly debited to the bank account of Mo$$s Rum. After calling the bank it was discovered that the payment was related to another customer, Mo Ron. The bank acknowledged the error and will credit R$11500$ to the business$$ bank account during March $2023.$

d$.$ A cheque from a customer for R$1235$ was deposited into the bank account and recorded in the financial records. The bank statement noted that the cheque was referred to drawer due to insufficient funds in the customer$$s bank account.

e$.$ Det Beet, a customer previously written off as bad, made a direct deposit into the bank account of the business as part payment for the debt previously owed. Det Beet paid R$1100.$

You are required to:

$1.$ Prepare the bank account that will be reflected in the General Ledger after making the necessary adjustments mentioned above. $(7$ Marks$)$

$2.$ Draft the bank reconciliation statement for the month ending $28$ February $2023.$

$(5$ Marks$)$