Nine-to-Five Limited engages in retail industry specialising in selling sportswear. Nine-to-Five Limited received a bank statement...

 

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Nine-to-Five Limited engages in retail industry specialising in selling sportswear. Nine-to-Five Limited received a bank statement issued by the Good Bank on 5 June 2021 and found that the monthly balance as at 31 May 2021 did not agree with the company's bank account balance on the same date. In the cash book of Nine-to-Five Limited, the bank account had a credit balance of $250 where the balance shown in the Good Bank is $14,850 credit balance. The accountant of the company found the following reasons for this: 1. The accounts clerk deposited checks amounting to $15,000 into the Good Bank through an auto teller machine after banking hours on 31 May 2021. The checks were not processed by the bank until 3 June 2021. 2. On 4 June 2021, the Good Bank informed Nine-to-Five Limited that a check received from a customer for $33,000 was returned due to insufficient funds. The company had not yet recorded the return of this check in the cash book. 3. Check no.126877 for $5,200 and no.126878 for $12,300 had not yet been presented to the bank. 4. Bank service charges of $240 had not yet been recorded in the cash book. 5. A check drawn for $4,280 in payment of electricity had been entered in the cash book as $4,820. 6. A deposit of $2,000 had been entered in the credit side of the cash book. 7. It was found that a check drawn by Line-to-Fire Limited in the amount of $5,000 had been recorded in Nine-to-Five Limited's bank statement. 8. Debit side of the cash book had been undercast by $46,300. Required: (a) Prepare the bank column in the cash book of Nine-to-Five Limited for May 2021 to show the adjusted balance. (8 marks) (b) Prepare a bank reconciliation statement starting at "Balance per bank statement" for Nine-to- Five Limited as at 31 May 2021. (7 marks) Nine-to-Five Limited engages in retail industry specialising in selling sportswear. Nine-to-Five Limited received a bank statement issued by the Good Bank on 5 June 2021 and found that the monthly balance as at 31 May 2021 did not agree with the company's bank account balance on the same date. In the cash book of Nine-to-Five Limited, the bank account had a credit balance of $250 where the balance shown in the Good Bank is $14,850 credit balance. The accountant of the company found the following reasons for this: 1. The accounts clerk deposited checks amounting to $15,000 into the Good Bank through an auto teller machine after banking hours on 31 May 2021. The checks were not processed by the bank until 3 June 2021. 2. On 4 June 2021, the Good Bank informed Nine-to-Five Limited that a check received from a customer for $33,000 was returned due to insufficient funds. The company had not yet recorded the return of this check in the cash book. 3. Check no.126877 for $5,200 and no.126878 for $12,300 had not yet been presented to the bank. 4. Bank service charges of $240 had not yet been recorded in the cash book. 5. A check drawn for $4,280 in payment of electricity had been entered in the cash book as $4,820. 6. A deposit of $2,000 had been entered in the credit side of the cash book. 7. It was found that a check drawn by Line-to-Fire Limited in the amount of $5,000 had been recorded in Nine-to-Five Limited's bank statement. 8. Debit side of the cash book had been undercast by $46,300. Required: (a) Prepare the bank column in the cash book of Nine-to-Five Limited for May 2021 to show the adjusted balance. (8 marks) (b) Prepare a bank reconciliation statement starting at "Balance per bank statement" for Nine-to- Five Limited as at 31 May 2021. (7 marks)

Answer rating: 100% (QA)

a Balance as per Cash book 250 Add Undercasting of cash book 46300 Electricity bill ... View the full answer