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Question Two c) BSD Ltd has prepared its October 2018 bank reconciliation for auditors to review....

Question Two c) BSD Ltd has prepared its October 2018 bank reconciliation for auditors to review. As at 31 October 2018 the ledger balance was GH¢ 2,450 (Credit) but the bank statement showed that the company has funds amounting to GH¢3,743. The following are useful information: The company arranged for the bank to transfer the dollar equivalent of GH¢ 500,000 to a supplier in the United States. Charges on the transfer of 0.5% have not been recorded in the books of BSD Ltd. The CEO of BSD Ltd arranged for an amount of GH¢3,000 to be transferred from his personal bank account into the company’s account. The bank made the transfer on 31 October 2018, but BSD Ltd has not made any entry in its books. A Cheque for Electricity Company amounting to GH¢5,600 issued and recorded correctly in the bank statements appeared in BSD ledger as GH¢6,500. The following cheques issued by BSD Ltd in October 2018 did not appear on the bank statement: Cheque # 00450-GH¢2,000 Cheque # 00456-GH¢ 4,800 Cheque # 00500-GH¢ 5,250 Three cheques received and booked by BSD Ltd amounting to GH¢ 4,800 were not credited by the bank Income earned on investment with an advice by the bank of GH¢2,457 was not recorded by the bank until 3 November 2018. Required: Prepare the adjusted cash book and bank reconciliation statement of BSD LTD

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Answer #1
Adjusted Cash Book of BSD Ltd as at 31st October 2018
Particulars Debit (in ‎GH₵) Credit (in ‎GH₵)
Bank Balance before adjustments (Overdraft) 2450
Charges on Tranfer not recorded 2500
Amount deposited by CEO not recorded 3000
Cheque amount incorrectly entered (6500-5600 = 900. Extra credit reversed) 900
Total 3900 4950
Net Bank Balance (Overdraft) -1050
Bank Reconciliation statement of BSD Ltd as at 31st October 2018
Particulars Amount (In GH₵)
Adjusted Cash Balance (Overdraft) -1050
Add:
Deposited not shown in Bank Statement 4800
Investment income not recorded by bank 2457
Less:
Cheque issued but not presented
Cheque 00450 2000
Cheque 00456 4800
Cheque 00500 5250
Bank Balance as per Bank Statement 3743
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