On 30 June 20X0, Cook's cash book showed that he had an overdraft of $300 on his current account at the bank. A bank statement as at the end of June 20XO showed that Cook was in credit with the bank by $65. On checking the cash book with the bank statement you find the following. (a) Cheques drawn, amounting to $500, had been entered in the cash book but had not been presented. (b) Cheques received, amounting to $400, had been entered in the cash book, but had not been credited by the bank. (c) On instructions from Cook the bank had transferred interest received on his deposit account amounting to $60 to his current account, recording the transfer on 5 July 20X0. However, this amount had been credited in the cash book as on 30 June 20X0. (d) Bank charges of $35 shown in the bank statement had not been entered in the cash book. (e) The payments side of the cash book had been undercast by $10. (f) Dividends received amounting to $200 had been paid direct to the bank and not entered in the cash book. (g)A cheque for $50 drawn on deposit account had been shown in the cash book as drawn on current account. (h) A cheque issued to Jones for $25 was replaced when out of date. It was entered again in the cash book, no other entry being made. Both cheques were included in the total of unpresented cheques shown above. Required (a)Indicate the appropriate adjustments in the cash book. (b) Prepare a statement reconciling the corrected cash book balance with that shown in the bank statement.
On 30 June 20X0, Cook's cash book showed that he had an overdraft of $300 on his current account at the bank. A bank statement as at the end of June 20XO showed that Cook was in credit with the bank by $65. On checking the cash book with the bank statement you find the following. (a) Cheques drawn, amounting to $500, had been entered in the cash book but had not been presented. (b) Cheques received, amounting to $400, had been entered in the cash book, but had not been credited by the bank. (c) On instructions from Cook the bank had transferred interest received on his deposit account amounting to $60 to his current account, recording the transfer on 5 July 20X0. However, this amount had been credited in the cash book as on 30 June 20X0. (d) Bank charges of $35 shown in the bank statement had not been entered in the cash book. (e) The payments side of the cash book had been undercast by $10. (f) Dividends received amounting to $200 had been paid direct to the bank and not entered in the cash book. (g)A cheque for $50 drawn on deposit account had been shown in the cash book as drawn on current account. (h) A cheque issued to Jones for $25 was replaced when out of date. It was entered again in the cash book, no other entry being made. Both cheques were included in the total of unpresented cheques shown above. Required (a)Indicate the appropriate adjustments in the cash book. (b) Prepare a statement reconciling the corrected cash book balance with that shown in the bank statement.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:On 30 June 20X0, Cook's cash book showed that he had an overdraft of $300 on his current account at the bank.
A bank statement as at the end of June 20XO showed that Cook was in credit with the bank by $65. On checking the cash
book with the bank statement you find the following.
(a) Cheques drawn, amounting to $500, had been entered in the cash book but had not been presented.
(b) Cheques received, amounting to $400, had been entered in the cash book, but had not been credited by the bank.
(c) On instructions from Cook the bank had transferred interest received on his deposit account amounting to $60 to his
current account, recording the transfer on 5 July 20X0. However, this amount had been credited in the cash book as on 30
June 20X0.
(d) Bank charges of $35 shown in the bank statement had not been entered in the cash book.
(e) The payments side of the cash book had been undercast by $10.
(f) Dividends received amounting to $200 had been paid direct to the bank and not entered in the cash book.
(g)A cheque for $50 drawn on deposit account had been shown in the cash book as drawn on current account.
(h) A cheque issued to Jones for $25 was replaced when out of date. It was entered again in the cash book, no other entry
being made. Both cheques were included in the total of unpresented cheques shown above.
Required
(a)Indicate the appropriate adjustments in the cash book.
(b) Prepare a statement reconciling the corrected cash book balance with that shown in the bank statement.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education