Theory question 102
Banking and Bank ReconciliationSection B (Answer any three questions)
Below is an extract of the Bank Statement of Messrs Jackson & Co. for April, 1987
Date | Details | Debit ₦ | Credit ₦ | Balance ₦
1/4/87 | Balance | | | 176,000 Cr
4/4/87 | Dasco Engineering | | 40,000 | 216,000 Cr
5/4/87 | Adeboya Builders | | 60,000 | 276,000 Cr
7/4/87 | Bisi Motors Cheque 011201 | 32,000 | | 244,000 Cr
9/4/87 | Jide Foods–Cheque 011202 | 57,000 | | 187,000 Cr
13/4/87 | Okin Oloja & Co. Cheque 011204 | 32,800 | | 154,200 Cr
14/4/87 | Bank charges | 7,280 | | 146,920 Cr
15/4/87 | Interest on Fixed Deposit | | 4,000 | 150,920 Cr
16/4/87 | Tolu Adeola & Co. cheque 011205 | 8,000 | | 142,920 Cr
30/4/87 | Kingsway Stores Cheque 011206 | 19,200 | | 123,720 Cr
You are given the following additional information: (a) Cheque No 011203 issued in favour of Tayo Ajao and Associates for ₦24,000 was presented to the Bank on 2nd May, 1987. (b) Advice in respect of Bank charges was received by Messrs Jackson & Co. on 6th May, 1987. (c) Cheque issued in favour of Jide Foods is for supplies to the Directors.
You are required to prepare: (i) The Cash Book of Messrs Jackson & Co. for April 1987 and (ii) A Bank Reconciliation Statement as at 30th April, 1987.
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(i) Cash Book (bank column), April 1987
Dr: balance b/d 176,000; Dasco Engineering 40,000; Adeboya Builders 60,000; total 276,000
Cr: Bisi Motors 32,000; Jide Foods (directors' supplies, drawings) 57,000; Tayo Ajao and Associates 24,000; Okin Oloja 32,800; Tolu Adeola 8,000; Kingsway Stores 19,200; balance c/d 103,000
Updating the cash book: balance 103,000 + interest on fixed deposit 4,000 − bank charges 7,280 = adjusted balance ₦99,720
(ii) Bank Reconciliation Statement as at 30 April 1987: balance per adjusted cash book 99,720; add unpresented cheque 011203 (Tayo Ajao) 24,000; balance per bank statement ₦123,720
Items that are on the bank statement but not yet in the cash book (charges, interest) are put into the cash book; timing items go in the reconciliation.