The bank statement for JubileeCake Ltd showed a balance of 22,200 on 31 May 2022. However,...

 

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The bank statement for JubileeCake Ltd showed a balance of £22,200 on 31 May 2022. However, the cash book shows a balance on the bank account of £31,250 at the same date. By comparing the cash book and the bank statement, you find the following information: 1. The cash book receipts side has been undercast by £1,100. 2. Dividends received of £2,100 have been paid directly into the bank account and bank charges of £410 are shown in the bank account but have not been recorded in the cash book. 3. A cheque received for £780 has been recorded in the cash book as £870. The correct amount is recorded in the bank statement. 4. Cheques paid to suppliers of £2,500 and receipts of £9,650 have been recorded in the cash book but have not yet been shown in the bank statement. 5. A cheque receipt for £3,450 banked on 20 May was returned unpaid on 31st May and has been shown as a debit on the bank statement. No entry has been made in the cash book to reflect the return of this cheque. 6. The bank paid a cheque received by JubileeCake Ltd for £1,150 into the account of Jubilee Party Ltd by mistake. The mistake has not yet been corrected by the bank at 31 May 2022. REQUIRED: (i) Calculate the adjusted cash book balance. (ii) Prepare the bank reconciliation at 31 May 2022. 4 marks 5 marks (iii) Bank reconciliations are one type of internal control. Identify another type of internal control and briefly explain why companies need internal controls. 4 marks The bank statement for JubileeCake Ltd showed a balance of £22,200 on 31 May 2022. However, the cash book shows a balance on the bank account of £31,250 at the same date. By comparing the cash book and the bank statement, you find the following information: 1. The cash book receipts side has been undercast by £1,100. 2. Dividends received of £2,100 have been paid directly into the bank account and bank charges of £410 are shown in the bank account but have not been recorded in the cash book. 3. A cheque received for £780 has been recorded in the cash book as £870. The correct amount is recorded in the bank statement. 4. Cheques paid to suppliers of £2,500 and receipts of £9,650 have been recorded in the cash book but have not yet been shown in the bank statement. 5. A cheque receipt for £3,450 banked on 20 May was returned unpaid on 31st May and has been shown as a debit on the bank statement. No entry has been made in the cash book to reflect the return of this cheque. 6. The bank paid a cheque received by JubileeCake Ltd for £1,150 into the account of Jubilee Party Ltd by mistake. The mistake has not yet been corrected by the bank at 31 May 2022. REQUIRED: (i) Calculate the adjusted cash book balance. (ii) Prepare the bank reconciliation at 31 May 2022. 4 marks 5 marks (iii) Bank reconciliations are one type of internal control. Identify another type of internal control and briefly explain why companies need internal controls. 4 marks

Answer rating: 100% (QA)

1 2 Dr Particulars Balance bd Undercast corrected Di... View the full answer