i need an answer for a past year question on bank reconciliation statement Watch

florance wee
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Hi all, my lecturer created this question and i tried to answer it but my balance as per cash book and as per bank statement won't balance .. i had a huge difference of 10 000.

The question is Hary has received his bank statement for the year December 31 2009. At the date, his balance as per bank statement amounted to $14130 whereas his own cash book showed a balance of $47330. His accountant investigated the matter, and discovered the following discrepancies:

a.Bank charges of $60 had not been entered in the cash book
b. checks drawn by hay and totalling $450 had not yet been presented to the bank.
c.Hay had not entered receipts of $530 in his cash book
d.the bank had not credited Hay with receipts of $1970 paid into the bank on December 31,2009
e..Debit memo amounting to 1240 had not been deducted in the cash book.
f.Hay had entered a payment of $560 in his cash book as $650
g. A check received for $300 from a customer had been returned by the bank marked NSF , but this had not been written back in the cash book.
h. Hay had brought down big opening cash book balance of $ 6585 as a debit balance instead of a credit balance.
i.An old check payment amounting to $880, which was previously marked NSF had been written back in the cash book, but the bank has added to the company's bank account as a deposit from customer.
j.some of hay's customers had paid to settle their debts by direct debit. Unfortunetly , the bank had credited some direct debits amounting to 16650 to another customer's account .



prepare a bank reconciliation as at december 31 2009.



i would be extremely grateful for replies .. thank you .. also what does no. h mean? confused!!!
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Holmstock
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(Original post by florance wee)
Hi all, my lecturer created this question and i tried to answer it but my balance as per cash book and as per bank statement won't balance .. i had a huge difference of 10 000.

The question is Hary has received his bank statement for the year December 31 2009. At the date, his balance as per bank statement amounted to $14130 whereas his own cash book showed a balance of $47330. His accountant investigated the matter, and discovered the following discrepancies:

a.Bank charges of $60 had not been entered in the cash book
b. checks drawn by hay and totalling $450 had not yet been presented to the bank.
c.Hay had not entered receipts of $530 in his cash book
d.the bank had not credited Hay with receipts of $1970 paid into the bank on December 31,2009
e..Debit memo amounting to 1240 had not been deducted in the cash book.
f.Hay had entered a payment of $560 in his cash book as $650
g. A check received for $300 from a customer had been returned by the bank marked NSF , but this had not been written back in the cash book.
h. Hay had brought down big opening cash book balance of $ 6585 as a debit balance instead of a credit balance.
i.An old check payment amounting to $880, which was previously marked NSF had been written back in the cash book, but the bank has added to the company's bank account as a deposit from customer.
j.some of hay's customers had paid to settle their debts by direct debit. Unfortunetly , the bank had credited some direct debits amounting to 16650 to another customer's account .



prepare a bank reconciliation as at december 31 2009.



i would be extremely grateful for replies .. thank you .. also what does no. h mean? confused!!!
I can do the bank rec, aside from point (i), where the wording is not very clear.

Assuming that Hay has positive funds deposited with the bank, identified as debits for savings and credits for borrowing from the bank, then (h) means that Hay's account was overdrawn at the beginning of the year, and he should have brought it forward as a credit balance. However, he treated it as a debit balance, so his 47,330 needs to be reduced by 2 x 6585 to correct his error.

Hope that helps?
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Holmstock
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(Original post by florance wee)
Hi all, my lecturer created this question and i tried to answer it but my balance as per cash book and as per bank statement won't balance .. i had a huge difference of 10 000.

The question is Hary has received his bank statement for the year December 31 2009. At the date, his balance as per bank statement amounted to $14130 whereas his own cash book showed a balance of $47330. His accountant investigated the matter, and discovered the following discrepancies:

a.Bank charges of $60 had not been entered in the cash book
b. checks drawn by hay and totalling $450 had not yet been presented to the bank.
c.Hay had not entered receipts of $530 in his cash book
d.the bank had not credited Hay with receipts of $1970 paid into the bank on December 31,2009
e..Debit memo amounting to 1240 had not been deducted in the cash book.
f.Hay had entered a payment of $560 in his cash book as $650
g. A check received for $300 from a customer had been returned by the bank marked NSF , but this had not been written back in the cash book.
h. Hay had brought down big opening cash book balance of $ 6585 as a debit balance instead of a credit balance.
i.An old check payment amounting to $880, which was previously marked NSF had been written back in the cash book, but the bank has added to the company's bank account as a deposit from customer.
j.some of hay's customers had paid to settle their debts by direct debit. Unfortunetly , the bank had credited some direct debits amounting to 16650 to another customer's account .



prepare a bank reconciliation as at december 31 2009.



i would be extremely grateful for replies .. thank you .. also what does no. h mean? confused!!!
I would reconcile it as:

Bank:

14130 less (b) 450, plus (d) 1970 plus (j) 16650, totalling 32300;

Cash book:

47330 less (a) 60 plus (c) 530 less (e) 1240 plus (f) 90 less (g) 300 less (h) 2 x 6585, totalling 33180.

(This assumes that the accounts should accrue for the receipts and payments not yet processed by the bank).

I am not clear whether item (i) is Hay's error or the bank's error.
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florance wee
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(Original post by Holmstock)
I can do the bank rec, aside from point (i), where the wording is not very clear.

Assuming that Hay has positive funds deposited with the bank, identified as debits for savings and credits for borrowing from the bank, then (h) means that Hay's account was overdrawn at the beginning of the year, and he should have brought it forward as a credit balance. However, he treated it as a debit balance, so his 47,330 needs to be reduced by 2 x 6585 to correct his error.

Hope that helps?

Thank you! it helped..yea for (h), initially i was confused. . because she could have worded that hay took money out of the cash account.. and debited it when it should have credited it. thanks

How about (b)? what does b mean? does it mean that the money is drawn out of the cash book to tranfer to the bank? but the bank has not recorded it?>
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