Antigua Trading Co Solution

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Antigua Trading Co. recently received its bank statement for the month of July 2001.
However, the bank balance as stated in its cash book differ from the balance which
appeared on the bank statement. The accountant of Antigua Trading Co. discovered the
following items that accounted for the difference in the two balances:
(i) Nine cheques totalling $14,823, which had been issued during the month of July 2001 did
not appear on the bank statement.
(ii) An overseas debtor of the firm had her bank transfer funds to the bank of Antigua
Trading to settle a debt of $8,178.
(iii) The bank through a standing order had paid the firm’s insurance premium of $3,515.
(iv) A cheque for $6,238 drawn on the account of Antigua Trust Co. was incorrectly debited
by the bank to the account of Antigua Trading Co.
(v) A cheque received from a customer for $2,504 was lodged to the bank account but it was
incorrectly recorded in the books of the firm as $2,584.
(vi) Bank charges of $180 were debited to the firm’s account by the bank.
(vii) A lodgement of $15,570 made at the night depository on July 31, 2001 did not appear on
the bank statement.
(viii) A cheque for $9,850 was lodged to the bank but appeared incorrectly on the bank
statement as $9,580.
(ix) The debit balance on the bank account as per the cash book on July 31, 2001 was $5,977.
Required:-
(a) Prepare an updated cash book showing the corrected bank balance at July 31, 2001.
(b) Using the corrected bank balance found in (a) above, prepare a bank reconciliation
statement as at July 31, 2001 to determine the bank balance as per the bank statement.
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