Theory question 107
Banking and Bank ReconciliationThe cash book of Ayede for the month ended 31st March, 2023 is as follows:
Cash Book (Bank Column)
Dr: March 1 Balance b/f Le 70,240; March 4 Cash sales 14,230; March 20 Leke 12,120; March 25 Rent received 6,320 — total 102,910
Cr: March 6 Ayo Le 12,130; March 12 Chinyere 6,510; March 26 Bala 20,320; March 31 Balance c/d 63,950 — total 102,910
Bank Statement for the month of March 2023 (Dr / Cr / Balance, Le)
March 1 Balance b/f — — 70,240
March 4 Cash — 14,230 — 84,470
March 6 Ayo 12,130 — — 72,340
March 12 Chinyere 6,510 — — 65,830
March 20 Leke — 12,120 — 77,950
March 25 Direct transfer — 20,000 — 97,950
March 26 VAT charges 500 — — 97,450
You are required to prepare:
(a) Adjusted Cash Book for the month of March 2023:
(b) Bank Reconciliation Statement as at 31st March 2023.
Show the model answer
(a) Adjusted Cash Book (Le): Dr Balance b/d 63,950; Direct transfer 20,000 = 83,950 | Cr VAT charges 500; Balance c/d 83,450.
(b) Bank Reconciliation Statement as at 31 March 2023 (Le):
Balance as per adjusted cash book 83,450
Add: unpresented cheque – Bala 20,320 = 103,770
Less: uncredited lodgement – rent received 6,320
Balance as per bank statement 97,450
Update the cash book with items only the bank knew about, then reconcile the timing differences.