2020 BGSS 3N POA EOY P1 Q2

2 Matthew owns a car repair workshop. The cash at bank account for April 2020 showed the following.

Cash at bank account

Date 2020

Particulars

Cheque Number

Debit $

Credit $

Balance $

April 1 

Balance b/d 

   

3 580 Dr

         2

Trade payable, Jill

2017

 

720

2 860 Dr

         5

Sales revenue

 

4 800

 

7 660 Dr

         6

Inventory

2018

 

1 100 

6 560 Dr

        11

Trade payable, Jing Xiang Trading

2019

 

800

5 760 Dr

        13

Trade receivable, Nick Co.

 

1 200

 

6 960 Dr

        16

Trade payable, Mark Enterprise

2020

 

3 310

3 650 Dr

        23

Trade receivable, Kent

 

1 100

 

4 750 Dr

        30

Rental

  

1 800

2 950 Dr

On May 1, the following bank statement was received by Matthew.

Date

Details

Payments $

Receipts $

Balance $

2020

    

April 1 

Balance b/d

  

3 580 Cr

         7

Cash deposit

 

4 800

8 380 Cr

         8

Cheque 2018 

1 100

 

7 280 Cr

        14

Cheque 2017

720

 

6 560 Cr

        15

Credit transfer: Commission income

 

310

6 870 Cr

        18

Cheque 2020

3 310

 

3 560 Cr

        19

Cheque deposit

 

1 200

4 760 Cr

        20

Direct payment: Utilities

170

 

4 590 Cr

        30

Bank charges

250

 

4 340 Cr

REQUIRED

a. Prepare the adjusted cash at bank account for the month of April 2020. Bring the balance down to the start of the next month.

[4]

b. Prepare the bank reconciliation statement as at 30 April 2020.

[5]

c. Explain the entry of $4 800 in the cash at bank account on 5 April 2020.

[1]

d. State a reason why cheques would be returned as dishonoured by the bank.

[1]

[TOTAL 11]

SOLUTION
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c)

The business received a cheque of $4 800 for a sale of goods.

d)

Any of the following reasons or other acceptable answers:

– cheque was post-dated

– cheque had expired

– amount in words did not match amount in figures

– information was not correct e.g. wrong signature

– there was insufficient funds in the payor’s account