Bank Reconciliation Statement and Accounting Adjustments

Bank Reconciliation Statement

Examine both bank statement and cash book, then update the cash book and perform a bank reconciliation to complete the following statement (you can use minus sig if the balance is negative) 

Bank reconciliation statement 

1.Amended brought down balance as per cash book (specify Dr or Cr)

2.Un- cleared receipts amount

3.Un-presented payments amount

4.Balance as per bank statement 

Answer all Questions

1.What should enter in the suspense account to make the trial balance balance and is that Dr or Cr?

2.The following errors come to light and you are asked to show the account entries that would correct these errors and eliminate the balance in the suspense account. note: the order of the accounts in each correction does not have any implication on whether the entries should be debit or credit?

(A)One of the above accounts contains a single incorrect posting. Meaning the balance is appearing in the wrong column of the trial balance.
Specify the relevant account for the first entry in the journal below and enter the correction you would make to that account in either the debit or credit column to amend the error. Complete the entry for the suspense account to clear this error in the accounts. 

(B)The business owner had paid a creditor invoice 1800+vat personally and had updated the creditor’s account and purchase ledger control account., but had not entered the transaction into the drawings account. Enter the correction in the relevant debit or credit column for the drawings and suspense accounts.

(C)Correcting the above two errors should clear the suspense account. What will be the new total of the trial balance

5.G, is not vat registered, owns equipment whose value will be reduced to zero over a period of 5 years using the straight line method of depreciation.at the start of the current year, the section of their accounts that shows these assets contained the following balances 

Equipment – 60000 dr
Equipment deprecation 24000 cr

(a)You are now making the adjustments at the end of the year. what will be the depreciation charge for the equipment for the year

(b)For how many years has G now owned the equipment 

(c)After the depreciation posted, half the equipment is now sold for 1400.what would be the balance on  its disposal account?

(d)Will this balance be a debit or credit 

(e)Does this mean that the disposal made a profit or loss

(f)What would be the revised figure for accumulated depreciation of the equipment after the disposal.

6.John is a vat registered and their financial year end 30 September, the following adjustments need to be made to the accounts at the year end.

(a)The company pay for software licenses for a year at a time, and last paid for some on 31st December at a net cost of 2700. The balance on this account is currently showing as 5380. What will be the cost software licences that will be charged to the profit and loss account of the year?

(b)They pay their advertising quarterly in advance and last paid 960+vat on 1st August. The trial balance on their advertising account is now 4160. What will be shown in the profit and loss account for advertising for the year?

(c)At 30th September John is still expecting to receive a bill for their bank charges. they estimate it to be around 325.at the present their bank charges account balance is 965.what is the total amount of bank charges in P & L account?

(d)They are expecting a purchase invoice 720 including vat. Their purchase account balance is currently showing 7360. What is the final value in the trading account for the year

(e)What is the total prepayments in the balance sheet

(f)Total accruals in the balance sheet

7.Isac had 78450 worth of stock showing as current asset at the end of the last accounting period. Since then they have purchased goods for resale for 886390. Now they have stock worth 66430.

(a)What is the value of the stock shown in the balance sheet 

(b)Cost of sales for the period (assuming no returns)

(c)After the accounts have been drafted it is decided that 3500 worth of stock is obsolete. What is the final figure that should be shown for closing stock in the balance sheet

8.At the end of its first year of trading, Bob had 47000 owing from customers and collected 45825 of this during the second year. At the end of the 2nd year they have 48000 owing from customers and have decided to set up a provision for doubtful debt based on the percentage level of bad debt for the previous year. 

(a)What charge should be made to the P & L account for this provision?

(b)What would be the net debtors balance show in the balance sheet after the provision is taken into account at the end of the year 2?

8. At the year of 3, the company decides to keep the same percentage calculation for the provision. If at the end of 3rd year 50000 was owing from customers. 

(a)What charge should be made to the p & L account for this year to keep the provision at the required level? (enter positive figure if it is increase, enter negative figure if it is decreasing)

(b)What is the net balance for debtors in the trial balance after this provision is taken into account?