Question 3 DROP OUT STORES BANK RECONCILIATION STATEMENT AT 30 APRIL 2007 R R Cr. balance per bank statement Add: outstanding deposit 1 324 180 1 504 Less: outstanding cheques: No. 361 1207 84 265 80 50 35 Dr. balance per cash book 514 990 Balances at 31 May 2007: bank statement (favourable) 324 cash book (dr.) 383 Items on May bank statement, but not in May cash book: 1. Deposit: R180. 2. Telegraphic transfer on 20 May by debtor, W. Pay, to settle rent for part of the building, R205. 3. Cheques no: 361 - R48 367 R80 724 - R16 Bank charges, R14. Interest on overdraft, R10. Cheque from D. Hans (a debtor) dishonoured, R125. 4. 5. Items in May cash book, but not on May bank statement: 1. Deposit R560 2. Cheques no. 401 - R30 403 - R45 Financial Accounting 1/ ICG / Page 45 2. The following became apparent from answers to queries: 1. Cheque no. 361 was issued for wages and the correct amount is R48. Cheque no. 368 was issued to a debtor who had duplicated his payment. The debtor returned the cheque and requested that the overpayment be held against his June account. Cheque no. 366 was issued to pay a creditor, Fox Ltd. It was lost in the post and a new cheque, no. 372, was issued and again debited to Fox Ltd. Cheque no. 724 was drawn by Drop Inn Stores. The bank will make the correction in June. 3. 4. Required (a) Draw up the bank reconciliation statement at 31 May 2007; and (b) complete the cash book. [15] 504