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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
QUESTION
Mo Rom has been running his brandy distilling company for the last years, Mos Rum. The business has a financial year end of February
The bookkeeper of the business partially performed the bank reconciliation for the month ending February 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 while the bank statement reflected a debit balance of R
After performing the comparison between the Financial Records and the Bank Statement the following information was noted:
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 The amount was only banked on March
b An amount of R was paid out of Mos 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 issued to Waltons for the purchase of stationery for R and
ii EFT issued to Telkom for telephone expenses incurred during February for R
Transactions recorded in the Bank Statement but not in the Financial Records
a The following debit orders were noted:
i R Santam for insurance premium
ii R Growth Point Properties in respect of Rental Space for the Distillery
iii. R Bank Charges
b The following EFT Payment orders which were issued during January and properly recorded in the financial records for January have been presented for payment with the bank:
i EFT R issued to Telkom for January telephone expenses.
ii EFT R was issued to Yeast and All for the purchase of yeast during January
c Payment of R was incorrectly debited to the bank account of Mos 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 to the business bank account during March
d A cheque from a customer for R 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 customers 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
You are required to:
Prepare the bank account that will be reflected in the General Ledger after making the necessary adjustments mentioned above. Marks
Draft the bank reconciliation statement for the month ending February
Marks
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