(99) (90) Note: Chq# wrongly entered in payments journal as $431.Bank statement recorded it as $341. Bank statement is correct.

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1 Question One: The cash journals shown below were prepared for Doncaster Glaziers for the month of March On 1 March the business had 2400 in the bank. Cash receipts journal Date Details Rec. no. amount banked amount received Gst received mar 1 cash fees cash fees cash fees cash fees cash fees cash fees cash fees cash fees cash fees cash fees cash fees interest Dishonoured cheque 875 B/S B/S (99) 180 (90) 18 (9) totals 14 Cash Payments Journal Date Details chq. no. total paid amount paid Gst paid mar 1 Rent Wages insurance Drawings Wages Petrol Stationery Error Bank charge (90) totals 4956 Note: Chq# wrongly entered in payments journal as 4.Bank statement recorded it as 341. Bank statement is correct. (a)compare the bank statement information on the next page with the firm s records and update the journals, if necessary.

2 (b)calculate the cash at bank balance according to the firm s records. Cash at beginning Cash receipts journal +14 Cash payments journal Cash balance as per firm s records 558 (c) Prepare bank reconciliation statement ( see below) (d) How could Doncaster glaziers protect their cash by giving one example and explaining it? Ans. Donsaster glaziers can put their cash in a safe or bank it at the end of the day to make sure their cash is safe in the event of theft or burglary. XYZ Bank Statement for Doncaster glaziers Doncaster Glaziers: Bank reconciliation statement as at March 2015 Balance as per bank statement CR plus Deposits not yet credited less Unpresented cheques Chq. No. Amount Balance as per business records

3 mar 1 Balance Brought forward cr 1 cash cr 2 cash cr 5 chq cr cr 7 cash/chq cr 9 cash cr 10 cash cr cr 14 chq cr cr 18 cash cr cr 22 chq cr 25 cash cr cr Bank charges Dishonoured Cheque Interest cr 722cR 767cR Because this is a error you don t circle. You tick as it is gone through the bank statement. Difference between (4-341=90)Record it as negative transaction in payments journal o Question 2 Seouds suit hire is owned by hamid Seoudwho maintains two cash journals. On st July the following statement was prepared. Bank reconciliation statement as at st July 2015 Dishonoured cheque, you record in receipts journal as a negative transaction. Balance as per bank statement Plus deposits not yet credited Less cheques not presented Balance as per firms records 540cr Chq# Amount OD Step 1: Do ticks and circles with the current bank statement and July Bank Reconciliation statement as at July 2015 This goes in to this month s bank reconciliation statement

4 Step 2: Do ticks and circles with the current bank statement and current receipts and payments journal Cash receipts Journal Dt Details Rec No Amount Fees GST banked Aug Cash fees Cash fees Cash fees Cash fees Cash fees Cash fees Cash fees Interest B/S 22 totals 4422 Because no sundry column don t bother recording 22 except in Amount Cash payments Journal Banked. Dt Details Chq# Bank Suits Wages Sundry GST Aug Wages Suits Wages Drawings Rates Wages Stationary Suits Wages Printer Drawings Wages Loan B/S application fee Bank charges B/S totals 8495 OD = Overdraft. Means negative balance Bank balance as per business records: Opening bank balance (you get this from last month s bank reconciliation statement) = OD +Cash receipts = Cash payments = OD

5 Bank reconciliation statement for Seouds Suit hire as at August 2017 Bank balance as per bank statement 1552 OD or Dr Add cheques not presented Less deposits not credited (682) Bank balance as per business records 6823 OD Note: Because it is overdraft we reverse the process which we normally do when there is a credit balance. (c ) where the following transactions would be recorded in the bank reconciliation process, assuming they only appeared in one record. : - a deposit of 1000 deposited at the bank does not appear on the bank statement Will be recorded in the bank reconciliation statement as the bank has not recorded it yet - a direct debit of 60 for bank fees bill has been incurred Will be recorded in cash payments journal as it has gone through as a payment through the business bank. - a cheque for 580 has been dishonoured WILL BE RECORDED AS A NEGATIVE AMONUNT IN CASH RECEIPTS JOURNAL AS PAYMENT HAS NOT COME THROUGH has been credited by the bank as interest to the businesses bank account Will be recorded in cash receipts journal as the bank as recorded it as a receipt in business bank account.