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The following information was extracted from the book of Forest Company on 31 January 2005. Cash Book (Bank Column) Bank Statement for month ended 31

The following information was extracted from the book of Forest Company on 31 January 2005.

Cash Book (Bank Column)

Bank Statement for month ended 31 /1/2005 Forest Company
Date Particulars Dt Ct Bal
1 Bal 15802.43
17 Transfer to credit (Mind Company) 2985.69 18788.12
17 Cash Depo 1100.00 19888.12
19 CP - Cheque no 653 1862.09 18026.03
20 CP - Cheque no 750 824.00 17202.03
22 Transfer of credit (Smart Ltd) 140.00 17342.03
30 CD - Cheque no 2800 4495.00 21837.03
30 Standing Order (ABD Insurance) 681.00 21156.03
30 CP- Cheque no 659 120.00 21036.03
30 CP - Cheque no 658 440.50 20595.53
31 CP - Cheque no 652 286.44 20309.09
31 Cheque book 7.50 20301.59

Cash Book (Bank Column) for the year of 2005 for FOREST COMPANY
Particulars Cheque No Amount (RM) Date Particulars Cheque No Amount (RM)
Balance 15802.43 10 Furniture Company 650 603.6
Sales 1100 12 SXY Company 651 220.4
Sales 2800 4495 14 Purchases 652 286.44
Comission expenses 659 120 17 Purchases 653 1862.09
Account rec (Amin) 9698 600 28 Purchases 654 4430.1
29 Furniture 655 70.4
29 SXY Company 656 610.6
30 Purchases 657 1226.63
30 Purchases 658 440.5
22117.43 31 Balance 12366.67
Balance b/d 12366.67 22117.43

Additional information

On 30 January, Forest Company wrongly debited a commission expenses of RM120.00. After further investigation, the following information was obtained:

  1. Transfer of credit from Mind Company and Smart Ltd of RM2,985.69 and Rm140.00 each respectively were credited in the bank statement. These amounts were not recorded in the business cash book.
  2. Cheque no 750 for RM824.00 was not a cheque issued by Forest Company, as the cheque number is different from the cheque issued by Forest Company. This chq was issued by another company, but was wrongly recorded by the bank in Forest Company bank statement.
  3. The bank statement was debited with RM681.00 for payment to an insurance company, ABC Insurance Company. This is a standing order given by Forest Company. This entry was not recorded in the cash book.
  4. Cheque no 659 issued by Forest Company for RM120.00 was wrongly recorded in the cash book as a receipt. The bank has cleared the cheque and it was correctly recorded in the bank statement.
  5. Bank statement was debited with RM7.50 for cheque book charges. This was not recorded in Forest Companys book.
  6. Payment of RM220.00 (chq no 651), RM4,430.10 (chq no 654), RM70.40 (chq no 655), RM610.60 (chq no 656) and RM1226.63 (chq no 657) have been recorded in Forest Companys cash book. However, the payment have not been debited in the bank statement because the cheque were not yet presented to the bank by the recipients of the cheques.
  7. Receipt from Account receivable Amin for RM600 was recorded in the cash book but was not recorded in the bank statement. This represents a cheque not yet credited on the date the bank statement is issued.

Prepare a bank reconciliation statement by updating the cash book. (80 marks)

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