the bank statement from CC Bank showing a balance of $27,000 at -.. , he book of
ID: 2572261 • Letter: T
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the bank statement from CC Bank showing a balance of $27,000 at -.. , he book of Cat Ltd. showed a cash balance $28,000 as at 30h June .. 2017. No outstanding checks were carried over from last month and no deposits in transits were noted at the end of last month. You are the accountant and need to preparc the bank reconciliation at 30th June, using the following information 1. Cat Ltd. had deposited total checks of $23,400 as at 30th June, but the bank showed deposit of $10,000 in the bank statement 2. A check $500 issued by Shy Ltd. in favour of Cat Ltd. was returned by the bank because of insufficient fund 3. Cat Ltd. issued a check of $3,600 for payment of equipment, but the company's assistant accountant erroneously recorded in accounting records as $4,600 4. Service charged by bank, $400 5. Total checks written by Cat Ltd. was $29,000 for paying the company's expenses but the checks cleared by the bank was $22,000 6. A note receivable of $5,300 was credited directly to Cat Ltd.'s bank account Required: (a) Prepare a bank reconciliation statement as at 30th June 2017. Show your (14 marks) workings (b) Prepare the journal entries that should be made in the accounting records of Cat (6 marks) Ltd. as a result of the above bank reconciliation Part II 16 marks) Below is the extracted information from Normal Ltd.'s records for the year 2016. Up to 31 December 2016, no adjusting entry has been made for the Allowance for Impairment account Accounts receivable on 31 Dec 2016 Net sales (80% on credit) for the year 2016 Allowance for impairment on 31 Dec 2016 S156,000 S700,000 S 2,000 (debit) (a) Prepare the adjusting entries to record the estimated uncollectible accounts for the year and give the estimated collectible amount of accounts receivable under the following two independent situations (show your workings) (i) if Normal uses Statement of Financial Position approach and the company estimated $16,000 as the uncollectible amount under aging analysisExplanation / Answer
Cat Ltd Bank Reconciliation Statement Ref Balance as per bank statement $27,000 1 Checks deposited but not yet credited by bank $13,400 (23400-10000) 2 Check returned for not suffidient fund $500 3 Check issued but amount entered $4600 instead of $3600 ($1,000) (4600-3600) 4 Service charged by bank $400 5 Check wrtten but not yet cleared ($7,000) (29000-22000) 6 Note receivable directly credited by bank ($5,300) Cash balance as per Cat Ltd books $28,000 Ref. JOURNAL ENTRY Account Titles & explanation Debit Credit 2 Shy Ltd $500 Cash $500 (To record dishonor of check issued by Shy Ltd) 3 Cash $4,600 Cash $3,600 (To record correction of wrong amount credited) 4 Bank charges $400 Cash $400 (To record bank charge expenses) 6 Cash $5,300 Account receivable $5,300 (To record receipt of $5300)
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