Theory question 108
Cash Book8. The following information has been extracted from the books of C. Bintu:
January 1 Balance at bank N683.
January 1 Drew and cashed cheque for N500
January 1 Bought for cash 14 model coats for N282.
January 3 B. Aluko paid by cheque N100 on account. Paid cheque into bank.
January 5 Sold for cash two costumes at N36 and N33 respectively.
January 5 Paid in cash, wages N72 and office expenses N10.
January 9 Paid by cheque, H. Abba Account N258 less 5% discount.
January 10 Cash sales to date, N76.
January 12 Paid by cheque M. Harrison Account N300.
January 14 Paid in cash carriage N33.
January 18 Paid by cheque B. Banjo Account N82.
January 13 Gave H. Abba a cheque on account N100.
January 18 Cash sales for the week N190.
January 18 B. Daodu paid N250 by cheque. Paid cheque into bank.
January 21 Purchased for cash 7 packets office pins at N1.17 per packet.
January 22 Paid cash into bank N100
You are required to prepare a three column Cash Book to record the above transactions.
Show the model answer
Three-column cash book (discount, cash, bank)
Dr side: Jan 1 balance b/d bank 683; Jan 1 bank (contra) cash 500; Jan 3 B. Aluko bank 100; Jan 5 sales cash 69; Jan 10 sales cash 76; Jan 18 sales cash 190; Jan 18 B. Daodu bank 250; Jan 22 cash (contra) bank 100. Totals: cash 835, bank 1,133; balance c/d bank 94.10 (overdrawn) to make 1,227.10.
Cr side: Jan 1 cash (contra) bank 500; Jan 1 purchases cash 282; Jan 5 wages cash 72; office expenses cash 10; Jan 9 H. Abba bank 245.10, discount received 12.90; Jan 12 M. Harrison bank 300; Jan 13 H. Abba bank 100; Jan 14 carriage cash 33; Jan 18 B. Banjo bank 82; Jan 21 office pins cash 8.19 (7 × 1.17); Jan 22 bank (contra) cash 100; balance c/d cash 329.81. Totals: discount 12.90; cash 835; bank 1,227.10.
Balances b/d: cash 329.81 (Dr); bank overdraft 94.10 (Cr).
Withdrawing cash from the bank for the business and paying cash into the bank are contra entries in both columns.