Activity (30 marks)
a. Show any adjustments needed to the company's accounting records.
b. Prepare a bank reconciliation statement as at 31 July 20XS.
The following is a summary from the cash book of a company for July 20X5:
Opening balance: 2,920
Receipts: 26,382
Payments: (26,245)
Closing balance: 3,057
On investigation, you discover that:
1. Bank charges of 40 shown on the bank statement have not been entered in the cash book.
2. A cheque drawn by the company for 125 to pay a supplier has been entered in the cash book as a receipt.
3. A cheque from a customer for 180, which was banked (and included above in receipts), has been returned by the bank as unpaid funds not available, but this has not been adjusted in the company's books.
4. An error of transposition has occurred in that the opening balance in the cash book should have been recorded as 2,290.
5. Cheques totaling 285 have been sent by post to suppliers but were not presented to the company's bank until August 20X5.
6. The last page of the bank account paying-in book shows a deposit of 1,260 which was not credited to the account by the bank until 1 August 20X5.
7. The company's bank statement at 31 July 20X5 shows a balance of 982.
