Admas University

Kality campus
Department of Accounting
Unit of competance: Establish and maintain a cash accounting system Level IV
Requirements
Form a group consisting of 1 upto 6
Clear and observable computation is required
The assignment will be marked out of 15%
Deadline is sene 07/10/2014
Respect for a deadline is a must
Plagiarism is strictly forbidden
1. On February 28, 2012, the cash ledger in Helen Company shows a debit balance of Birr
19,144.15 while the bank statement provided by Abyssinia bank indicates a balance of Birr
31,391. 40. A receipt of February 28, for Birr 6,215.50 was not included in February bank
statement. In addition the checks, which were issued but not paid by the bank during this month
totals Birr 11,021.50. Credit memorandums sent by the bank indicated that notes receivable left
with the bank for Birr 6,000 had been collected and credited for Birr 6,300 including interest
revenue of Birr 300. The bank statement included in debit memorandums for Birr 28.75 as a
service charge for the month of February. Check No- 1334 issued for Birr 855 had been recorded
by bank as Birr 585. A check for Birr 1,275 had been recorded by Helen Company as Birr2,175; it
was for the payment of an obligation to Alem Company on account.

Required:

A. Prepare bank reconciliation for Helen Company for the month of February.
B. Make the necessary journal entries.
2. On May 31, 2010, the cash account in Merry Company shows a debit balance of Birr13,215.80
while the bank statement provided by Dashen bank indicates a balance of Birr 19,513.90 the
following items are identified in order to reconcile the two cash balances:
A. Checks outstanding totalled Birr 7,070.10.
B. A deposit of Birr 3,915.20, representing receipts of May 31, had been made too late to
appear on the bank statement.
C. The bank had collected Birr 3,120 on interest- bearing note left for collection. The face of
the note was Birr 3, 000.
D. A check for Birr 69 returned with the statement had been recorded erroneously in the check
register as Birr 96. The check was for the payment of an obligation to Helen Company for
the purchase of office supplies on account.
E. A check drawn for Birr 42 had been wrongly charged by the bank as Birr 24.
F. Bank service charges for May amounted to Birr 21.80.

Required:-

A. Prepare bank reconciliation for Merry Company for the month of May.
B. Make the necessary journal entries.
3. Shown below is the information needed to prepare bank reconciliation for Z Company at
December 31.
 A. At December 31, cash per the bank statement was Birr 15,981; cash per the company’s
records was Birr 17,445.
B. Two-debit memorandum accompanied the bank statement: service charges for December
of Birr 24, and a Birr 600 check drawn by AMI marked ‘NSF’.
C. Cash receipts of Birr 4,353 on December 31 were not deposited until January.
D. The following checks had been issued in December but were not included among the paid
checks returned by the bank: no. 620 for Birr 978, no. 630 for Birr 2,052, and no. 641 for Birr
483.

Required:-

A. Prepare a bank reconciliation at December 31

B. Prepare the necessary journal entry or entries to update the accounting records
based on the reconciliation.
4. On January1, 2006, ABC Company established a petty cash fund to make payments for minor
expenditures for Birr 500. During January the petty cash receipts indicate payments that are
made for the following items.
Postage expenses…………………………………………… Birr 189.60
Office supplies……………………………………………… 112.75
Minor expenses……………………………………………… 60.05
Miscellaneous expenses…………………………………… 40.00
On January 31, 2006 the cash balance in the petty cash box Br. 95.20.

Required: - Prepare the necessary entries to record the petty cash transaction for the month of
January, 2006