Q # 02.The accountant of the ABC & Co is attempting to reconcile the balance shown in the cash book with that appearing on the bank statements. According to the cash book the balance at the bank as at May 31, 2006 was Rs. 19,000 whilst the bank statement disclosed an overdrawn amount Rs. 4,700.

Upon investigation, the Accountant identified the following discrepancies:

1) Cheques paid to Summer Limited for Rs.3, 400 have been entered in the cash book as Rs. 4, 300.
2) Cash paid into the bank for Rs. 1,000 had been entered in the cash book as Rs.900.
3) A transfer of Rs. 15,000 to the Midlands Saving Bank had not been entered in the cash book.
4) A receipt of Rs. 100 shown on the bank statement had not been entered in the cash book.
5) Cheques drawn amounting to Rs. 400 had not been paid into the bank.
6) The cash book balance had been incorrectly brought down at June 1, 2005 as a debit balance of Rs.12,000 instead of a debit balance of Rs 11,000.
7) Bank charges of Rs. 200 do not appear in the cash book.
8) Receipts of Rs. 9,000 paid into the bank on May 31, 2006 did not appear on the bank statement until June 1, 2006.
9) A standing order payment of Rs. 300 had not been entered in the cash book.
10) Cheques of Rs. 500 previously received and paid into the bank had been returned by the subscriber’s bank marked ‘account closed’
11) The bank received directly Rs. 1,000 from an anonymous subscriber.
12) Cheques paid into the bank had been incorrectly totaled. The total amount should have been Rs. 1,700 instead of Rs. 1,500.

Required:

i) Correct the errors in the cash book.
ii) Prepare a bank reconciliation statement as at May 31, 2006.