The following information is available to reconcile Linear Sportwear's book balance of bank with its bank statement cash balance as of November 30. The November 30 bank balance according to the accounting records is RM78,356, and the bank statement cash balance for that date is RM83,525.

1. i. The bank erroneously cleared a RM480 cheque against the account in November that was not issued by Linear. The cheque documentation included with the bank statement indicates the cheque was actually issued by Lighthouse Electrical.
2. ii. On 30 November, the bank issued a credit memorandum for RM53 interest earned on Linear's account.
3. iii. When the November cheques are compared with entries in the accounting records, it is found that cheque No. 1828 had been correctly drawn for RM1,530 to pay for advertising but was erroneously entered in the accounting records as RM1,350.
4. iv. A credit memorandum indicates that the bank collected RM10,000 cash on a note receivable for Linear, deducted a RM30 collection fee, and credited the balance to the company's Bank account. Linear did not record this transaction before receiving the statement.
5. v. A debit memorandum of RM895 is enclosed with the bank statement for an NSF check for RM870 received from a customer. The bank assessed a RM25 fee for processing it.
6. vi. Linear's 30 November daily cash receipts of RM5,102 were placed in the bank's night depository on that date, but do not appear on the 30 November bank statement.
7. vii. Linear's 30 November cash disbursements journal indicates that cheque No. 1837 for RM584 and cheque No. 1840 for RM1,219 were both written and entered in the accounting records, but are not among the canceled cheques.

Required:

a. Prepare the bank reconciliation for this company as of 30 November.

b. Prepare the journal entries necessary to bring the company's book balance of cash into conformity with the reconciled cash balance as of 30 November.

Answer rating: 100% (QA)

Linear Sportwears a Bank reconciliation statement Amount RM Amount RM Balance as per books 7835600 B... View the full answer