The Smart Supplies Inc. is operating its business in GTA and dealing with different products. The company
Question:
The Smart Supplies Inc. is operating its business in GTA and dealing with different products. The company maintains its bank account with TD bank. The bank sent statement at the end of each moth. Martin the CEO of the organization normally check the cash book balance regularly in order to see everything going on smoothly. The Cashier who maintains cash book gives Martin monthly cash balance information. In the month of July 2019, Martin noted that there is a big different in between the balance as per TD Bank statement and the balance as per Cash Book. He was confused and could not understand the reason why. He was also worried to note a huge difference between Cash Book Balance and the Bank Statement. The bank statement balance is much less than the Cash Book Balance. He was surprised thinking where the cash might go from the bank. Martin also not sure how much the cash the company might be having by the end of June.
Martin engaged you as an accountant to let him know why there is a huge different in between the cash book balance and the bank statement.
The business record and the month end bank statement show the following:
Balance as per Bank Statement $595.
Balance as per Cash Book record $1,882.
Sometimes customers send money to the bank by electronic transfer. It is noted in the bank statement that there is an EFT customer collection $300.
As the bank provides services to the business normally debit bank charge at a regular interval. The bank statement shows that there was a service charge of an amount $12.
The bank statement includes Three NSF (Not Sufficient Funds) from 3 different customers.
M & Co $70
FM Inc. 20
Muller M 30
The cheque book of the company got finished and the company ordered for a new cheque book. The printing charged for the cheque book is shown by the bank statement $9
The company issued few cheques to the following customers which has not yet cleared by the bank (Outstanding Cheques) till the last day of the month. These cheques are shown below against the customers and CQ numbers:
MC Miller CQ No 546 $200
Peter CQ No 647 $300
Khan CQ No 764 $103
On June 30th the cashier deposited three cheques received from customers. These cheques were deposited to the bank by the cashier. The bank collected these cheques (Deposit in Transit) in the month of July. The name of customer CQ number is given below:
John M. CQ No 354 $1,000
Paul S. CQ No 333 588
Gagandeep CQ No 435 200
A cheque given for salary during the month $290. By mistake the cashier wrote in the cash book as 29.
Required:
1) You need to write a short report to Martin showing how much cash the company exactly had in on 30th June, 2019. The report must include two Bank Reconciliation statement (Starting with Cash Book Balance and Bank Statement Balance).
2) Explain each point why you have deducted or added in your statement.
College Mathematics for Business Economics Life Sciences and Social Sciences
ISBN: 978-0321614001
12th edition
Authors: Raymond A. Barnett, Michael R. Ziegler, Karl E. Byleen