UNIVERSITY OF GHANA BUSINESS SCHOOL
DEPEARTMENT OF ACCOUNTING
UGBS 205: FUNDAMENTALS OF ACCOUNTING METHODS
FIRST SEMESTER 2016/2017 ACADEMIC YEAR
Tutorial Set 4
Question 1
On 2nd April, 2013 DGEK Ltd received its monthly bank statement which showed that was a
bank overdraft of GH¢2,129,000.00. The balance was not in agreement with the balance
shown in the bank column of the company’s cash book. The chief cashier carried out a
reconciliation which revealed the following:
1. Bank charges for the quarter ended 31 March, 2013 amounting to GH¢48,000.00 had
been omitted from the cash book.
2. A page in the cash book of debit entries had been understated by GH¢600,000.00 and the
incorrect total carried forward to the next page.
3. A dividend cheque received for GH¢340,000.00 had been entered twice in the cash
book.
4. The company’s agent in Tema had paid into a local bank a sum of GH¢1,550,000.00 but
this was not shown on the bank statement.
5. A standing order of GH¢110,000.00 to a trade association had been duly paid by the
bank but there was no entry in the cash book.
6. Cheques totalling GH¢4,920,000.00 had been delivered to suppliers on 30 March 2013
but none of these had as yet been presented to the bank
7. A cheque received for GH¢154,000.00 had been entered in the cash book as
GH¢145,000.00.
8. The bank statement revealed a credit transfer receivable for GH¢291,000.00 but after
enquiries it was discovered that this related to another company.
9. A cheque of GH¢120,000.00 being hire purchase instalment payment was due on 20
January, 2013. The amount was correctly entered by the company but the bank had
inadvertently debited another company.
10. The bank statement recorded that a cheque for GH¢185,000.00 paid into the bank had
been subsequently dishonoured. The company was unaware of this.
Required:
(a) Prepare a corrected cash book
(b) Prepare Bank Reconciliation statement as at 31 March, 2013.
Question 2
EsselAnderson Consult just received account statement for June 2014 from its bankers, and
has engaged you to reconcile that with its cash book. The cash book entries and account
statement for the month of June 2014 are as follow.
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CASH BOOK
Date Particulars Amount Date Particulars Amount
2014 GH¢ 2014 GH¢
01-Jun Balance b/f 10,250 03-Jun Cash 3,000
03-Jun Dedeede Ltd (GCB, 160042) 5,400 05-Jun Cash 22,500
05-Jun Steph Plc (UBA, 120123) 17,800 07-Jun Rolaws Ltd (Cheque # 660144) 5,100
10-Jun Mr. Cooke (SSB, 110456) 9,500 10-Jun Fiifi-Pee (Cheque # 660145) 6,000
15-Jun Aprukusu (GCB, 460462) 560 14-Jun Fiifi-Kay (Cheque # 660146) 4,800
19-Jun Annie Ltd (GCB, 130043) 18,250 18-Jun Cash 8,000
22-Jun Mr. Coker (SSB, 110463) 2,680 22-Jun Pinaman (Cheque # 660147) 17,550
25-Jun Amoakoma Ent (SCB, 101245) 2,810 28-Jun Opeimu (Cheque # 660148) 2,500
28-Jun Cash 18,500 30-Jun Balance c/f 16,300
85,750 85,750
01-Jul Balance b/f 16,300
ACCOUNT STATEMENT FOR JUNE 2014
Withdrawal Deposit Balance
Date Narration GH¢ GH¢ GH¢
01-Jun Balance 10,250.00
03-Jun Cash (3,000.00) 7,250.00
05-Jun Cash (22,500.00) (15,250.00)
07-Jun Cheque deposit (GCB, 160042) 5,400.00 (9,850.00)
09-Jun Cheque deposit (UBA, 120123) 17,800.00 7,950.00
13-Jun Cheque deposit (SSB, 110456) 9,500.00 17,450.00
13-Jun Cheque withdrawal (Cheque # 660144) (5,100.00) 12,350.00
15-Jun Cheque withdrawal (Cheque # 660145) (6,000.00) 6,350.00
17-Jun Cheque deposit (GCB, 460642) 560.00 6,910.00
18-Jun Cash (8,000.00) (1,090.00)
21-Jun Credit Transfer (Ref.: Laimie & Associates) 7,800.00 6,710.00
23-Jun Cheque deposit (GCB, 130043) 18,250.00 24,960.00
27-Jun Telephone bill (800.00) 24,160.00
27-Jun Commission (5.00) 24,155.00
28-Jun Cash 18,500.00 42,655.00
30-Jun IFDR monthly charge (5.00) 42,650.00
30-Jun Interest on line of credit (250.00) 42,400.00
Additional information:
I. You inquired about the IFDR monthly charge, and the bank admitted that it was
charged to the firm’s account in error.
II. The telephone bill of GH¢800 was paid by the bank on behalf of the firm in pursuant
to a standing order from the firm. The commission of GH¢5 was charged by the bank
for executing that standing order.
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III. You have been informed that the SSB cheque (No. 110463) received from Mr. Coker
was dishonoured.
Required:
a) Update the firm’s cash book.
b) Prepare a bank reconciliation statement to reconcile the revised bank balance in the
cash book with the bank statement balance.
Question 3
The summary of the bank column of the book of Never Give Up Supermarket for the month
ended 30th September is as follows:
Cash Book (Bank Column)
GH¢ GH¢
Opening balance 450,000 Total payment 6,750,000
Total receipts 6,500,000 Closing balance 200,000
6,950,000 6,950,000
The bank statement received showed a balance which differed from that of the cash book.
Your investigations of the accounting record revealed the following:
a. Standing order payment in respect of insurance and trade subscriptions amounting to
GH¢30,000 and GH¢65,000 respectively had been made by the bank and entered in
the bank statement but omitted from the cash book;
b. The bank had wrongly debited a cheque for GH¢250,000 which should have been
placed against another customer’s account;
c. Cheques drawn up to 30th September 2014 nut not submitted for payment by the
payees totalled GH¢206,000;
d. Credit transfers which had been received by the bank but which has not been entered
in the cash book totalled GH¢120,000;
e. Cheques received from customers amounting to GH¢390,000 entered in the cash
book on 30th September 2014 were not credited by the bank until 6th October 2014;
f. Bank charges of GH¢45,000 shown in the bank statement had not been entered in the
cash book;
g. A cheque drawn for GH¢105,000 had been entered in the cash book as GH¢150,000
and a cash book page on the receipt side had been understated by GH¢200,000; and
h. A cheque of GH¢70,000 drawn by Never Give Up Supermarket was correctly
entered in the cash book but debited to the bank statement as GH¢7,000.
Required:
I) Make the appropriate adjustment in the cash book to show the balance which should
appear on 30th September 2014
II) Calculate the balance shown on the bank statement by means of reconciliation
statement.
Question 4
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The cash book, bank column of Takyi Company Ltd showed a credit balance of GH¢578,000
while the bank statement for the period showed a debit balance of GH¢338,000 on 31 March
2015.
A thorough investigation revealed the following:
i. Cheques drawn amounting to GH¢195,0000 had not been presented to the bank for
payment;
ii. The following cheques and cash deposits entered in the cash book and paid to the
bank had not been credited by the bank: cash deposits GH¢76,500; cheques receipts:
Gifty Asare GH¢54,500; Stephen Asamoah GH¢34,000;
iii. A cash deposit into the bank of GH¢97,800 was recorded as GH¢79,800 in the cash
book;
iv. Bank charges of GH¢10,900 and standing order payment of GH¢12,100 relating to
telephone bills entered on the bank statement had not been recorded in the cash book;
v. A cheque of GH¢245,000 drawn by the firm had been charged by the bank in error
to another customer’s account;
vi. A dividend of GH¢15,000 paid direct to the bank had not been entered in the cash
book;
vii. A cheque for GH¢20,000 paid into bank had been dishonoured and shown as such by
the bank but no entry of the dishonour had been made in the cash book;
viii. A cheque drawn for GH¢32,000 had been entered in the cash book in the error
GH¢23,000;
ix. A cheque for GH¢16,000 drawn by another customer of the same name had been
charged to the firm’s bank account in error.
Required:
a) Show the appropriate adjustments to be made in the cash book
b) Prepare a bank reconciliation statement as at 31st March 2015
Question 5
Suuntinwong Ltd operates a current account with Access Bank Ltd. All payments and
receipts are passed through this account. The accounts officer prepared the following bank
reconciliation statement at December 31, 2013:
GH¢
Balance per bank statement 21,000,000
Add: Uncredited cheques 4,620,000
25,620,000
Less: unpresented cheques 6,000,000
Balance per cash book 19,620,000
The bank transactions for January 2014 are:
Per Bank Per Cash Book
GH¢'000 GH¢'000
Balance at Jan. 31, 2014 25,650 27,750
Jan. cheque deposits 15,000 17,730
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Jan. Withdrawals 12,300 9,600
Jan. Credit transfers 3,700 -
Jan., standing orders (insurance) 1,000 -
Jan., Reversal of cheque credited in error 705 -
Jan., Commission on turnover 45 -
You are required to:
a) the adjusted cash book for Jan. 2014
b) the bank reconciliation statement as at Jan. 31, 2014
Question 6
The bank statement of Lemon and Co Ltd for the period ended 31st may 2012 showed an
overdraft balance of GH¢1,310.00
The company’s cash book showed a debit balance of GH¢3,154.25.
The following differences were discovered:
a) A cheque paid for rent on 6th May for GH¢895.00was recorded as GH¢985.00
b) A cheque was received from a customer, less 5% cash discount for goods invoiced at
GH¢600.00. The full invoice value was recorded in the cash book.
c) Cheques to the value of GH¢7,504 paid into the bank were not credited.
d) Two cheques for GH¢1,054.25 and GH¢1,855.75 paid to creditors had not been
presented for payment.
e) Bank charges amounting to GH¢140.50 had not been recorded in the cash book.
f) A standing order for GH¢315.00 was paid by the Bank in respect of Telephone bills
but did not appear in the cash book.
g) An amount of GH¢4.00 for cheque books issued had not been recorded in the cash
book.
h) Interest on Government bonds of GH¢653.25 was paid directly into the bank account.
No entry was made in the cash book.
i) A cheque for GH¢124.00 had been returned by the bank marked ‘R/D’. This had not
been recorded in the Cash book.
You are required to:
i) Draw up a revised cash book
ii) Prepare a bank reconciliation statement
Question 7
The cash book of Amofa Brothers showed a certain credit balance at 30th June 2007 while the
bank statement showed a debit balance of GH¢1,162,000. On investigation, you made the
following discoveries:
a. Lodgements totalling GH¢762,000 had not been credited by the bank
b. Cheques paid to suppliers totalling GH¢258,000 had not been presented to the bank
c. A cheque for GH¢15,000 drawn on Amoafo Brothers had been wrongly debited by
the bank
d. Interest on Government Treasury Bills totalling GH¢52,100 were credited by the bank
on 30th June; no entries were made in the cash book
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e. An issue of cheque for GH¢22,000 had been entered on the wrong side of the cash
book
f. A cheque for GH¢80,000 deposited on 20th June had been returned by the bank with
the remarks “No funds available”, but no adjustment had been made in the cash book.
g. A cheque of GH¢30,000 received from a customer had been correctly entered in the
cash book but was credited by the bank as GH¢20,000
h. A cheque for GH¢6,600 drawn in respect of electricity bill had been incorrectly
entered in the cash book as GH¢66,000
i. The bank statement showed banker’s charges totalling GH¢136,000; these had not
been entered in the cash book.
j. A cheque for GH¢10,000 paid to a supplier had been correctly entered in the cash
book but debited by the bank as GH¢1,000.
k. Cheques payment in favour of Amofa Brothers totalling GH¢4,500 had been correctly
recorded in the bank statement , but included in the cash book payments as GH¢5,400
Required:
a) Prepare the cash book and show the original balance and the adjusted balance
b) Prepare a bank reconciliation statement as on 30th June, 2007.
Question 8
Agya Koo Nimo, a sole proprietor has just received his bank statement for the month ending
August 31, 2014 and is confused as to how his cash book of a certain amount differed from
that of the bank statement with a credit balance of GH¢35,000. Upon further enquiries, the
following information became available:
a. A cheque for GH¢45,000 drawn by Agya Nimo has been wrongly charged against his
account
b. A cheque issued for GH¢35,100 has been entered correctly in the cash book but
entered in the statement as GH¢31,500
c. A cheque receipt of GH¢25,400 has been entered in the cash book as a payment of
GH¢24,500
d. A dividend of GH¢3,000 paid directly to the bank has been dishonoured but no entry
of this transaction has been made in the cash book
e. The credit side of the cash book has been over-added by GH¢15,000
f. Bank charges and standing order payment of GH¢3,400 and GH¢5,400 respectively
have been entered in the bank statement but not the cash book
g. Cheques received totalling GH¢54,000 entered in the cash book has not been entered
in the bank statement
h. Cheques drawn totalling GH¢75,800 were not paid until September 4, 2014.
i. Trade credits of GH¢34,000 have been entered in the bank statement but not in the
cash book
Required
I. Update Agya Koo Nimo’s Cash book
II. Prepare a statement to reconcile the Adjusted Cash book with the balance shown on
the bank Statement
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