Question 5 (10 marks) The bank overdraft of Samantha and Co, on December 31 2014

Question

Question 5 (10 marks) The bank overdraft of Samantha and Co, on December 31 2014 as per the cashbook is N$18 000. From the following information, ascertain the adjusted cash balance and prepare the bank reconciliation statement i. Unpresented cheque for N$6 000 ii. Uncleared cheque N$3 400 iii. Bank interest debited in the bank statement only N$ 1000 iv. Bills collected and credited in the bank statement only N$1 600 v. Cheque of Arusha dishonored N$ 1000 vi. Cheque issued to Kalla and Co of N$600 not yet entered in the cashbook

Explanation / Answer

Solution:

Samantha & Co Bank Reconciliation 31-Dec-14 1 Cash balance according to company’s records -$18,000.00 2 Add: Bills collected by bank $1,600.00 3 -$16,400.00 4 Less: Interest debited $1,000.00 5 Less: NSF Cheque $1,000.00 6 Less: Cheque issued but not recorded $600.00 7 Adjusted Cash balance (Overdraft) -$19,000.00

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