Question 1 10 marks Sigma Property Co developed the followin

Question 1: 10 marks Sigma Property Co developed the following information in recording its bank statement for the month of March. Balance per books March 31 Balance per bank statement March 31 S 2,905 $10,900 Checks written in March but still outstanding $7,000. Checks written correctly paid by Sigma to a supplier for $ 5,600 but was debited by the bank for $2,800. Deposits of March 30 and 31 not yet recorded by bank $5,200. NSF check of customer returned by bank $1,200. Check No. 210 for $594 was correctly issued and paid by bank but incorrectly entered in the cash payments journal as payment on account for $549, (1) (2) (3) (4) (5) (6) Bank service charge for March was $50. (7) A payment on account was incorrectly entered in the cash payments journal and posted to the accounts payable subsidiary tedger for $824-when Check No. 318 was correctly prepared for $284. The check cleared the bank in March. (8) The bank collected a note receivable for the company for $4,000 plus $1 50 interest revenue. Instructions: Prepare a bank reconciliation for Sigma Co at March 31.

Solution

BANK RECONCILIATION AS AT 31 MARCH

Balance as per books as at 31 March 2905

Add: Cheques are written in March but still outstanding 7000

Add: Cheques debited less by bank 2800

Less: Deposits not recorded by bank 5200

Less: Cheque returned by the bank 1200

Less: Bank service charge 50

Add: Incorrect entry in cash 540

Add: Interest revenue 150

Less: Excess expense (594-549) 45

Add: Note Receivable 4000

Balance as per bank statement as at 31 March 10900