The bank balance of John did not agree with the cash book debit balance of1,365,000 as at 31 July 2022. On comparing the bank statement and the cash book he found the following differences: The unpresented cheques amounted to 174000 Cheques amounting to278000banked on 29th July were not credited by the bank until 3rd October 2022. Bank charges amounting to 24000 had been debited in the bank account. Interest of 31000 on fixed deposit had been credited to the account by the bank. A cheque of 75000 deposited on20th may was returned unpaid. Standing order amounting to 95000 had been paid by the bank. A cheque of 74000 had been credited in the cash book as 47000 Required: Adjusted cash book Bank reconciliation statement Show the journal entries necessary to correct the following errors: Rent Received sh 2500 have been credited to the Commissions Received account. Bank charges sh 500 have been debited to the Business Rates account. Completely omitted from then books is a payment of Motor Expenses by cheque sh 700. (iv) A loan from Bariu sh 20,000 has been entered on the credit side of the Capital account. (v) Goods taken for own use sh 2000 have been debited to the Purchases account and credited to Drawings.

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter6: Bank Accounts, Cash Funds, And Internal Controls

Section: Chapter Questions

Problem 5E

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Question

The bank balance of John did not agree with the cash book debit balance of1,365,000 as at 31 July 2022. On comparing the bank statement and the cash book he found the following differences:
The unpresented cheques amounted to 174000
Cheques amounting to278000banked on 29th July were not credited by the bank until 3rd October 2022.
Bank charges amounting to 24000 had been debited in the bank account.
Interest of 31000 on fixed deposit had been credited to the account by the bank.
A cheque of 75000 deposited on20th may was returned unpaid.
Standing order amounting to 95000 had been paid by the bank.
A cheque of 74000 had been credited in the cash book as 47000

Required:

Rent Received sh 2500 have been credited to the Commissions Received account.
Bank charges sh 500 have been debited to the Business Rates account.
Completely omitted from then books is a payment of Motor Expenses by cheque sh 700.

(iv) A loan from Bariu sh 20,000 has been entered on the credit side of the Capital account.

(v) Goods taken for own use sh 2000 have been debited to the Purchases account and credited to Drawings.

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