Question

accounting

Question 3
Jet is owner of Jet Cafe. At the end of each month, Jet prepares a bank reconciliation statement for his business bank account. At 31 December 2019 his ledger balance was RM1,869 (credit) and his bank statement showed that he had funds of RM210 at the bank.
He has the following information:
(i) Jet has arranged for RM1,800 to be transferred from his personal bank account into the business bank account. The bank made the transfer on 30 December, but Jet has not made any entry for it in his records.
(ii) On 21 December, Jet withdrew RM300 cash which he did not record.
(iii) Cheque number 202018, which Jet issued to a supplier, appears on the bank statement as RM550. Jet incorrectly recorded the cheque as RM560.
(iv) The bank debited Jet’s account with charges of RM200 during December. Jet has not recorded these charges.
(v) On 31 December, Jet lodged RM450. On the bank statement, this amount is dated 3 January 2020.
(vi) Jet was advised by the bank that he earned RM62 interest for the period in December that his account was in credit. Jet recorded this in December, but the bank did not credit his account until January 2020.
(vii) Three of the cheques issued in December, with a total value of RM1,005, were not debited on the bank statement until after 31 December.
(viii) A cheque for RM276, issued to a supplier, was cancelled but Jet has not recorded the cancellation of the cheque.

Required:
(a) Show the bank account in Jet’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. [8 marks]
(b) Prepare a reconciliation of the bank statement balance to the corrected balance on the bank account in Jet’s general ledger. [5 marks]
(c) Indicate how the bank balance will be reported in Jet’s final accounts and the
amount to be reported. [2 marks]

Answer 1

a).

Cash at Bank A/c
Date	Particulars	Amount	Date	PartlcuLars	Amount
	Jet Capital	RM 1800	Dec31.2019	Balance b/d	RM 1869
	Accolnls Payallle(RM 560 - RMS50)	10		Drawings	300
	Accounts Payable	276		Bank Charges	200
Dec31,2019	Balance c/d	283
		RM2,369			RM2,369

Journal Entries
Date	Accounts title and Explanation	Debit	Credit
Dec31	Cash	RM 1,800
	Jet' Capital		RM 1,800
	(To record cash invested in business)
Dec31	Cash	RM 10
	Accounts Payable		RM10
	(To rectify error in recording1 cheque)
Dec31	Cash	RM276
	Accounts Payable		RM276
	(To record cheque cancelled)
Dec31	Drawing	RM300
	Cash		RM300
	(To record amount Withdrawn)
Dec31	Bank Seivice charcies	RM200
	Cash		RM200
	(To record bank service charges )

b).

Jet Cafe
Bank Reconciliation Statement
As on December 31, 2019
Balance as per Bank Statement		RM210
Add: Deoosit in transit		450
Interest Revenue not credited by bank		62
		RM722
Less: Outstanding Cheques		(1,005)
Adjusted Bank Cash Balance		RM(283)
Company's Cash Balance(Books)		RM(1 ,869)
Add: Deposit not recorded	RM 1,800
Error in recording Cheque 202018(RM 560 ·RM 550)	10
Cheque cancelled but not recorded	276	2,086
		RM217
Less: Cash Withdrawn not recorded	RM300
Bank charaes	200	(500)
Adjusted Company's Cash Balance		RM(283)

(c).