Prepare cash book and bank reconciliation statement

I don't know how to prepare a cash book and a bank reconciliation statement.

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Solution Summary

The solution explains the format of the cash book and how to extract the information for a bank reconciliation. The reconciling amounts are listed to arrive at a reconciled balance of cash. Also included is an explanation about why the reconciling items appear and how they would disappear.

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Pat Mitchell, CPA (retired)

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Active since 2006

BBA, University of Alaska

CPA, Ernest & Ernest

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Answer.doc

Prepare the cash book, showing all the necessary entries to calculate the correct cash book balance of
Ringo Company as at 31 December 2005.

CASH BOOK (Bank Account Only)
2005 $ 2005 $
Dec 31 Bal b/f 26,192 Dec 31 Dishonoured cheque 3,000
Cheque received 17,000 Cheque Issued 13,000
error corrected Bal c/f 47,532
Cash book error 7,400
Credit transfer 12,000
Bank statement error 940
63,532 63,532

Using the correct cash book balance calculated in (a) above, prepare a bank reconciliation statement for
Ringo Company as at 31 December 2005.

Ringo Company
Bank Reconciliation Statement as at 31 December 2005
$ $
Balance as per cash book 47,532
Add: Credit transfer from a customer 12,000
Unpresented cheques 13,000 25,000

Less: Bank Lodgement not yet credit by bank 38,000
Dishonoured cheque 3,000 41,000
Balance as per bank statement 31,532