Test2_sem2_05 - Question 1 Bank Reconciliations (20 marks)...

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(20 marks) Underwater Enterprises Ltd (UEL) receives its Bank Statement for the month of August 2005, which showed an ending balance of $4569.50 (Cr). The Bank Ledger account on 31 August 2005, before the posting of the cash journals, has a credit balance of $1649.10 in UEL’s records. The manager of UEL is a little concerned because she thought that her cash balance should be in funds. The balances to date in the Cash Receipts and Cash Payments Journals are $7,074.60 and $7,020.00 respectively. The following reconciling items are identified: 1. The bank has debited UEL’s account for $27.00 being bank charges for the month. 2. UEL’s Bank Statement has been direct credited with an amount of $1,250.00. This amount was paid in by a customer by bank transfer and has not yet been recorded by UEL. 3. On checking it is noticed that three cheques have not yet appeared on the Bank Statement. These cheques were detailed as follows: Date Cheque Number Amount 12 August No. 1445 $2,578 22 August No. 1467 $1,200 27 August No. 1470 $3,960 4. The Bank Statement shows a direct debit of $545, which was wrongly charged to UEL’s account by the bank. This error will be corrected in the next Bank Statement. 5. In the August Bank Statement a cheque for $580 from Margaret Barker is shown as dishonoured. As yet this has not been adjusted in the UEL records. 6. On checking the accounting records against the Bank Statement it appears that a cheque for $230 for electrical expenses has been incorrectly recorded as $320 by UEL. 7. UEL has a term deposit with the bank and interest earned on this deposit for the previous quarter is shown in the Bank Statement as $350. This has not been recorded by UEL. 8. Cash takings for 31 August were deposited at the bank by 4pm. These takings amounted to $2,112 and they will not be credited by the bank until the next working day. REQUIRED: a) Prepare updated Cash Journals to account for the appropriate transactions (1 to 8 above) in UEL’s accounting records. (5 marks) b) Prepare the Bank Ledger account as it would appear in the accounting records of UEL after posting of the Cash Journals. Use the 3-column ledger format
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Test2_sem2_05 - Question 1 Bank Reconciliations (20 marks)...

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