Question

3.1	REQUIRED
Use the information provided below to prepare the Bank account in the ledger of Prince Stores showing all the entries that would have been made in the cash journals. Clearly show the contra account for each entry. Balance the account. The cash journals are not required. Use the following format:

General ledger

DR				BANK					CR
2020 Jan 31					2020 Jan 31

INFORMATION
When comparing the bank statement with the cash journals of Prince Stores for January 2020 the following differences, amongst others, and additional information is available:
1.	The bank account in the ledger of Prince Stores had a favourable balance of R12 000 on 31 January 2020 before the bank statement was received.
2.	A cheque for R3 000 that was issued to a creditor, RT Manufacturers, was lost by the payee. The bank has been instructed to stop payment on the cheque. No entry has been made for the cancellation. A replacement cheque has not yet been issued.
3.	A cheque issued to Metro Distributors for equipment purchased was erroneously entered in the Cash Payments Journal as R6 400 instead of R4 600.
4.	Entries that appeared on the bank statement for January 2020 but not in the cash journals:
4.1	A cheque for R1 200 previously received from a debtor, S. Winston, in settlement of an account of R1 300 was dishonoured by the bank due to insufficient funds.
4.2	The bank statement reflected the following additional entries: Service fees R450 Cash deposit fees R150 Interest income R100
4.3	The bank statement showed a credit entry for a loan obtained from the bank, R100 000.

3.2	REQUIRED
Redraft the following Debtors Control account of Caltex Traders after taking into account the errors and omissions.

INFORMATION

The inexperienced bookkeeper of Siyakha Traders prepared the following account in the general ledger:

DR                                                      DEBTORS CONTROL                                                     CR

2019				2019
May 01	Balance	b/d	150 000	May 31	Bank and discount	CRJ	112 500
31	Bad debts	J	1 500		Bank	CPJ	3 000
	Interest income	J	300		Sales returns	SRJ	4 500
	Balance	c/d	73 200		Sales	SJ	105 000
			225 000				225 000

                                                                         2019

              Jun 01    Balance                         b/d      73 200

Additional information
1.	Three entries appear on the incorrect side of the account.
2.	The debtors control column in the Sales Journal was overcast by R3 000.
3.	A credit note for R1 100 issued to debtor L. Mthethwa was incorrectly entered in the Sales Returns Journal as R1 000.
4.	A cheque for R1 000 previously received from a debtor, J. Kitch, in settlement of her account was dishonoured by the bank due to insufficient funds. This transaction has not yet been recorded.
5.	A debtor, J. Visser, who owed R2 000 was declared insolvent. His account must now be written off.
6.	F. Pillay must be charged interest at 12% per annum for 1 month on his overdue account of R2 400.

Answer 1

	Books of Prince stores
Ref. no.	Bank Ledger account	Debit	Credit		Contra a/c
1	Balance	12000
2	Accounts payable	3000			Accounts payable
3	Excess credit rectified (6400-4600)	1800			Equipment
4.1	NSF cheque		1200		Accounts receivable
4.2	Bank service fees	450			Miscellaneous expense
	Cash deposit fees	150			Miscellaneous expense
	Interest income		100		Interest income
4.3	Loanfrom bank received	100000			Bank Loan a/c
	Ending Balance c/d		116100
		117400	117400

	DEBTORS CONTROL	Debit	Credit
Ref. no.	May 1, 2019 Balance before redrafting		73200
1	Bad debts -Wrong debit-credited twice		3000
1	Interest income-Wrong debit, credited twice		600
1	Sales-Wrong credit-debited twice	210000
2	Overcasting rectified		3000
3	Credit note-short credit recitfied(1100-1000)		100
4	Restoration of a/c--NSF cheque	1000
5	Insolvent a/c written-off		2000
6	Interest on overdue a/c(2400*12%/12)	24
	Re-drafted a/c balance c/d		129124
		211024	211024