Understanding Bookkeeping

The Cash Book Of Jim Co. showed a Bank Overdraft at 31 Jan 2007 of $1,800

When you checked the Bank Statement as at that date with the Cash Book , you discovered the following:

(a) the following items appearing in the Cash Book do not appear in the Bank Statement:-

Jan

16 Cheque No 123 John $350

18 Cheque No 145 Tim $185

23 Cheque No 156 Sean $215

31 Lodgement at bank $400

(b) the following items appear in the Bank Statement but NOT ENTERED in the Cash Book:-

Jan

15 Raymond’s cheque dishonoured $120

24 Interest on overdraft $10

25 Cheque book charge $20

26 Dividends collected $110

27 Credit transfer - Ronald $810

31 Roy’s cheque dishonored $45

Question:

You are required to:-

( i) make the necessary entries in the Cash Book and bring down the adjusted balance

(ii) prepare a Bank Reconciliation Statement to show the balance as per Bank Statement.

[Answer: ADJUSTD CASH BOOK BALANCE-$1,075 OVERDRAFT & BALANCE AS PER BANK STATEMENT $725 OVERDRAFT]

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