Question: Prepare a bank reconciliation statement for Sonter Roger using the following information.
Sonter Roger
Cash receipt journal
Date Receipt no Particular Receipts Bank
2005
Apr 03 41 J small $53.45
7 42 B Johnston $105.24
10 CRS Sales $63.45
21 43 M james $86.87
25 44 R Freeman $83.19
29 CRS Sales $36.05
30 45 L Rodgers $56.46
Sonter Roger
Cash payment journal
Date Cheque no Particulars Datails Bank
2005
Apr -04 741 Wages $20.25
10 742 J brown $50.63
12 743 Purchase $77.94
15 744 J Taiti $78.45
20 745 R penny $29.19
26 746 Adverting $25.70
30 747 Rent $81.90
Sonter Roger
bank statement
Date Particulars Debit Credit Balance
Apr 01 Balance 247.50 Dr
4 Deposit $53.45 194.05 Dr
5 741 $20.25 214.30 Dr
8 Deposit $105.24 109.06 Dr
11 743 $77.94 187.00 Dr
12 Deposit $63.45 123.55 Dr
13 742 $50.63 174.18 Dr
21 745 $29.19 203.37 Dr
22 Deposit $86.87 116.50 Dr
24 744 $78.45 194.95 Dr
26 Deposit $83.19 111.76 Dr
29 746 $25.70 137.46 Dr
30 Deposit $36.05
Interest on overdraft $5.70
Cheque book $6.80
Dividends $7.90 106.01 Dr
1. **State the problem:** Prepare a bank reconciliation statement for Sonter Roger using the given cash receipt journal, cash payment journal, and bank statement for April 2005.
2. **Understand the bank reconciliation statement:** It reconciles the bank balance as per the company's books (cash book) with the bank statement balance by accounting for timing differences and errors.
3. **Calculate the cash book balance:**
- Total receipts (deposits) from cash receipt journal:
$$53.45 + 105.24 + 63.45 + 86.87 + 83.19 + 36.05 + 56.46 = 484.71$$
- Total payments (withdrawals) from cash payment journal:
$$20.25 + 50.63 + 77.94 + 78.45 + 29.19 + 25.70 + 81.90 = 363.06$$
- Opening balance (from bank statement on Apr 1): $247.50$ Dr (overdraft)
4. **Calculate closing cash book balance:**
$$\text{Closing balance} = \text{Opening balance} + \text{Receipts} - \text{Payments}$$
$$= -247.50 + 484.71 - 363.06 = -247.50 + 121.65 = -125.85$$
So, the cash book shows an overdraft of $125.85$ (Dr).
5. **Bank statement closing balance:**
Given as $106.01$ Dr (overdraft).
6. **Identify reconciling items:**
- Deposits in transit (deposits recorded in cash book but not yet in bank statement):
- Apr 30 deposit $56.46$ not in bank statement.
- Outstanding cheques (payments recorded in cash book but not yet cleared in bank):
- Cheque 747 for $81.90$ (Rent) not in bank statement.
- Bank charges and interest not recorded in cash book:
- Interest on overdraft $5.70$
- Cheque book charges $6.80$
- Dividends $7.90$
7. **Prepare the bank reconciliation statement:**
**Bank statement overdraft balance (Dr):** $106.01$
Add: Deposits in transit
$$+ 56.46$$
Less: Outstanding cheques
$$- 81.90$$
Adjusted bank balance:
$$106.01 + 56.46 - 81.90 = 80.57$$
**Cash book overdraft balance (Dr):** $125.85$
Less: Bank charges and interest not recorded in cash book
$$125.85 - (5.70 + 6.80 + 7.90) = 125.85 - 20.40 = 105.45$$
8. **Compare adjusted balances:**
- Adjusted bank balance: $80.57$ Dr
- Adjusted cash book balance: $105.45$ Dr
Difference of $105.45 - 80.57 = 24.88$ remains unexplained, possibly due to timing or errors.
9. **Conclusion:** The bank reconciliation statement shows the adjusted balances and reconciling items, explaining most differences between cash book and bank statement balances.