Question

Kambonde Shapaka is a business that deals in silver-crafted jewellery. You are given the following information.

Kambonde Shapaka Cash Book November 2016

Date	Details	fol	Amount (N$)	Date	Details	fol (Chq)	Amount
Nov.1	Balance		1809	Nov.1	Purchases	no.821	175
2	Cash		295	1	Rates		240
4	Jim Jankovich		244	3	Electricity and Water	no.822	181
7	Cash sales		270	8	Sanchia Sander	no.823	42
12	Cash sales		127	9	Candy Wong	no.824	562
17	Fiona Finkelstein		255	16	Machine	no.825	185
20	Cash sales		365	20	Purchase	no.826	124
26	Angela Adams		125	27	Patrick Lambide	no.827	334
28	Aaban Abbas		245	30	Joshua Ngidi	no.828	105
30	Cash sales		285
				30	Balance	c/d	2310
			4258				4258
Dec 1	Balance	b/d	2310

Bank Statement Of Kambonde Shapaka

Standard Bank - Account Name: Sparkling Silver - Account Number 25 88 74 132

Date : Details : Amount Dr/Cr : Balance

2016 Nov

1 : Balance : 2215

2 : Cheque number (no.820) : 210 Dr : 2005

3 : Cash deposit : 295 Cr : 2300

4 : Cheque deposit : 244 Cr : 2544

5 : Cash deposit : 178 Cr : 2722

5 : Cheque number (no.821) : 175 Dr : 2544

8 : Cheque number (no.822) : 240 Dr : 2722

8 : Cash deposit : 270 Cr : 2547

10 : Cheque number (no.825) : 562 Dr : 2307

12 : Cash deposit (no.823) : 181 Dr : 2577

13 : Cash deposit : 127 Cr : 2015

16 : Cheque number (no.824) : 42 Dr : 1834

18 : Cheque number (no.826) : 135 Dr : 1961

18 : Cash deposit : 255 Cr : 1919

21 : Cash deposit : 365 Cr : 1784

26 : Cheque deposit : 125 Cr : 2529

28 : Cheque number (no.828) : 334 Dr : 2195

29 : Cheque deposit - Abbas : 245 Cr : 2440

30 : Unpaid cheque (dishonored) : 125 Dr : 2315

30 : Direct deposit - Jan Jankovich : 497 Cr 2812

30 : Bank charges : 4 Dr : 2808

Additional information: A cheque payment of N$135 (cheque number 826) for the purchase of a machine that is used to clean jewelry was erroneously recorded as N$ 185 in the Cash Book.

Prepare and draw up the necessary adjustment in Kambonde Shapaka General Journal; Kambonde Shapaka Cash Book; and draw up Kambonde Shapaka Bank Reconciliation Statement as at November 2016.

Answer 1

Rectification of error in Cash book
The entry is passed for $ 185, whereas it should have been $135.

Original Entry
Machinery Account	Debit	185
Cash / Bank Account	Credit	185
Correct entry
Machinery Account	Debit	135
Cash / Bank Account	Credit	135
Rectification Entry
Cash / Bank Account	Debit	50
Machinery Account	Credit	50
(Being retification entry passed)
Think of this entry as reversal of the wrong debit and credit for the diffrential amount.

Kambonde Shapaka Bank Reconciliation Statement as at November 2016.
Balance as per cash book	2310
Balance as per bank statement	2808
Difference	-498
Transactions not reflecting in cash book			Transactions not reflecting in bank statement
Expense - (Cheque no.820)	-210		Joshua Ngidi (Chq no. 828)	-105
Bank charges	-4		Puchase (Chq no. 826)	-124
Cash deposit	178		Cash Sales	260
Cash deposit	181
Direct deposit - Jan Kovich	497
Cheque dishonoured	-125
Rectification entry	-50
Total	467		Total	31
Net Adjustments	-498
Difference in cash book and bank statement	-498
Differnce	0