Reference no: EM132603287
Question - On 30 June 2017, Cook's cash book showed an overdraft of K300 on his current account. A bank statement as at the end of June 2017 showed that Cook was in credit with the bank by K65.
On checking the cash book with the bank statement you find the following.
(a) Cheques drawn of K500, entered in the cash book but not yet presented.
(b) Cheques received of K400, entered in the cash book, but not yet credited by the bank.
(c) The bank had transferred interest received on deposit account of K60 to current account, recording the transfer on 5 July 2017. This amount had been credited in the cash book as on 30 June 2017.
(d) Bank charges of K35 in the bank statement had not been entered in the cash book.
(e) The payments side of the cash book had been undercast by K10.
(f) Dividends received amounting to K200 were paid direct to the bank and not entered in the cash book.
(g) A cheque for K50 drawn on deposit account had been shown in the cash book as drawn on current account.
(h) A cheque issued to Jones for K25 was replaced when out of date. It was credited again in the cash book, no other entry being made. Both cheques were included in the total of unpresented cheques shown above.
Required -
(a) Prepare a revised cash book.
(b) Prepare a statement reconciling the amended balance with that shown in the bank statement.
(c) Indicate how the bank balance will be reported in Cook''s final accounts, and the value to be reported.
(d) Describe any three causes of discrepancies between cashbook balance and bank statement balance.