Question

Ah Jie is owner of Jie Kopitiam. At the end of each month, Ah Jie prepares a bank reconciliation statement for her business bank account. At 31 May 2019 her ledger balance was RM2,759 (credit) and her bank statement showed that she had funds of RM131 at the bank.
She has the following information:
(i) Jie has arranged for RM2,500 to be transferred from her personal bank account into the business bank account. The bank made the transfer on 30 May, but Jie has not made any entry for it in her records.
(ii) On 21 May, Jie withdrew RM100 cash which she did not record.
(iii) Cheque number 202003, which Jie issued to a supplier, appears on the bank statement as RM650. Jie incorrectly recorded the cheque as RM560.
(iv) The bank debited Jie’s account with charges of RM129 during May. Jie has not recorded these charges.
(v) On 31 May, Jie lodged RM457. On the bank statement, this amount is dated 3 June 2019.
(vi) Jie was advised by the bank that she earned RM52 interest for the period in May that her account was in credit. Jie recorded this in May, but the bank did not credit her account until June 2019.
(vii) Three of the cheques issued in May, with a total value of RM942, were not debited on the bank statement until after 31 May.
(viii) A cheque for RM276, issued to a supplier, was cancelled but Jie has not recorded the cancellation of the cheque.
Required:
(a) Show the bank account in Jie’s general ledger, including any adjusting entries required due to the information given in points (i) to (viii). Note: You MUST present your answer in a format which clearly indicates whether each entry is a debit or a credit. [14 marks]

(b) Prepare a reconciliation of the bank statement balance to the corrected balance on the bank account in Jie’s general ledger. [3 marks]
(c) Indicate how the bank balance will be reported in Jie’s final accounts and the value to be reported. [3 marks]

Answer 1

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