On 1 February 2019 the bank account in the general ledger of Rush Retailers had a favorable balance of R1 350. Kim, the bookkeeper correctly determined that the preliminary total of the cash journals for Feb 2019 are as follows:
Total of cash receipts jnl R186750
Total of cash payments jnl R12350
The cash journals are posted to the bank account in the general ledger after matching the jnls with the bank statement. Kim received the bank statement ending 28 February 2019 on 4 March 2019. On comparing the bank statement with the cash journals the following differences were noted
1. The banks statement showed a favorable balance of R25425 at 28 Feb 2019.
2.The following cheques in the cpj have not been presented at the bank
Chq 709 R2680
Chq 773 R3927
EFT 722 R6750
EFT 727 R17968
3. Cheque 709 was issued on 17 August 2018 in favour of K Dala a creditor. The cheque is now stale and must be cancelled. K Dala was paid in cash during February 2019 and the cash payment was correctly recorded.
4. A comparison of the cash receipts journal with the bank statement revealed that a deposit of R72300 has not yet been entered on the bank statement.
5. The following charges appeared on the bank statement but not yet entered in the journals:
Service Fees R762
Interest on Overdraft R343
6. The bank statement showed a deposit of R4950 which was made by Rasch Traders, another client of the banks but erroneously entered on Rush retailers bank statement.
7. The cash receipts journal showed a deposit of R39 625 by a debtor , S Ndlovu, while the correct amount of R37 925 appeared on the bank statement
8. A cheque number 972 drawn by Rasch Traders for R7550 appeared on Rush Retailers bank statement but not in their journals.
9. A receipt of R16 350 issued to G Luck, a debtor, was incorrectly entered in the cash receipts journal as R14 100
10. Cheque number 769 for R4605 in favor of M Stone, a creditor, was issued but subsequently cancelled and not given to the creditor. Kim erroneously entered the cheque in the cash payments journal.
1. Prepare the supplementary cash receipts journal and the supplementary cash payments journal. Begin each journal with the relevant preliminary total provided above. Only the bank columns need to be completed. Total the bank column and post to the general ledger bank account.
2. Complete the general ledger bank account and balance the account as at 28 February 2019
1.3 The bank reconciliation statement at 28 February 2019.
Feb 28, 2019
|Balance per bank statement
|Balance as per books
|Deposits in transit
|Error in recording cash receipt
|Amount erroneously charged
|Bank service fee
|Check # 709
|Check # 773
|Interest on overdraft
|Error in recording deposit
|Amount credited in error
|Adjusted cash balance
|Adjusted cash balance
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