The following is a summary of a cash book as presented by George Ltd for the month of October:

All receipts are banked and all payments are made by cheque

On investigation you discover:

(1) Bank charges of £136 entered on the bank statement have not been entered in the cash book.

(2) Cheques drawn amounting to £267 had not been presented to the bank for payment.

(3) Cheques received totalling £762 had been entered in the cash book and paid into the bank, but had not been credited by the bank until 3 November.

(4) A cheque for £22 for sundries had been entered in the cash book as a receipt instead of as a payment.

(5) A cheque received from K Jones for £80 had been returned by the bank and marked ‘No funds available’. No adjustment has been made in the cash book.

(6) A standing order for a business rates instalment of £150 on 30 October had not been entered in the cash book.

(7) All dividends received are credited directly to the bank account. During October amounts totalling £62 were credited by the bank but no entries were made in the cash book.

(8) A cheque drawn for £66 for stationery had been incorrectly entered in the cash book as £60.

(9) The balance brought forward in the cash book should have been £711, not £761.

Required:

(a) Show the adjustments required in the cash book.

(b) Prepare a bank reconciliation statement as at 31 October.

Transcribed Image Text:

Receipts Balance c/d £ 1,469 554 2,023 Balance b/d Payments £ 761 1,262 2,023