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Tadese

1. Kiya plc had a cash book balance of ETB 15,600 on February 28, 2015 but its bank statement showed a balance of ETB 14,200.50, a difference of ETB 1,399.50. 2. The difference was due to a deposit of ETB 6,800 recorded on March 2, a check of ETB 6,200 withdrawn on March 4, and recording errors of ETB 75.5 and ETB 180. 3. Journal entries were made on February 28 for a bank service charge of ETB 300 and to correct the recording error of a check for ETB 180.

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37 views4 pages

Tadese

1. Kiya plc had a cash book balance of ETB 15,600 on February 28, 2015 but its bank statement showed a balance of ETB 14,200.50, a difference of ETB 1,399.50. 2. The difference was due to a deposit of ETB 6,800 recorded on March 2, a check of ETB 6,200 withdrawn on March 4, and recording errors of ETB 75.5 and ETB 180. 3. Journal entries were made on February 28 for a bank service charge of ETB 300 and to correct the recording error of a check for ETB 180.

Uploaded by

talila
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Project one

1. Kiya plc is a company which is established for the manufacturing and distribution of kk
product. The cash book of the enterprise has shown a balance of birr 15,600 on February
28,2015. At the same date the bank statement balance of the business account was birr
14,200.50
The difference that was accounted for the two balance was as follows
 A deposit of Feb 2015birr 6,800 was recorded on the bank statement on march 2,2015
 A check written for Ato mesfin a customer of kiya plc was withdrawn from bank on march 4,
2015 birr 6,200
 A bank service charge of birr 300 was not recorded by depositor
 An accountant of kiya plc recorded a check accounting birr 5,750 collected from customer as
birr 5,570. The face value of the check was birr 5,750
 The bank credited kiya deposit erroneously birr 75.5 instead of birr 755.00
Task 1.1 prepare bank reconciliation for the month of February 28,2015
Task 1.2 prepare necessary journal entries
Solution

Kiya Plc.

Bank Reconciliation

February 28, 2015

Cash balance per bank statement………………………………. ETB 14,200.50

Add: Deposits in transit…………………………………………………. 6,800

Bank Error………………………………………………………… 679.5

Total……………………………………………………………………. 21,680

Less: Outstanding checks:

The check written for Ato Mesfin but withdrawn

After February 28, 2015 (On March 04, 2015) ……………............(6200)

Adjusted cash balance per bank……………………………………ETB 15,480

Cash balance per books………………………………………………ETB 15,600

Add: Error in recording check…………………………………………….180

Total………………………………………………………………………. 15,780

Less: Bank Service Charge………………………………………………. (300)

Adjusted cash balance per books……………………………………ETB 15,480

Entries from Bank Reconciliation

a. Bank Charge Expense.

February 28, 2015 Bank Charge Expense…………….300

Cash……………………………….300

(To record bank service Charges of ETB 300)


b. collection of note receivable

February 28, 2015 Cash……………………………………180

Notes Receivable……………………………180

(Collection of zero interest bearing Notes Receivable)

2.

S.no Name of employee Basic salary in birr Desert allowance

1 Ato Reta 3,000 300

2 Ato Abdi 2,300 230

3 w/ro Tafesech 2,400 240

4 w/ro Netsanet 5,800 580

Additional information

 All employees have 5% of their basic salary for credit association saving

 Pension contribution by the employee and employer is 7% and 11% respectively

 All employees are permanent and 40 hrs. per week

1. Prepare payroll table which shows the basic salary gross deduction and net pay for the month
march 2015

2. Make the necessary transaction that are related to payroll

3. Pass the required entries when you pay the withholding


Solution

No Name of Earnings Gross Deductions


Employee Earning
Basis Allow OT Employee Pension Other Total Net
Salary Income Contribution Dedn Deduction Pay
tax

1 Ato Reta 3000 300 3300

2 Ato Abdi 2300 230 2530

3 W/ro 2400 240 2640


Tafesech

4 W/ro 5800 580 6380


Netsanet

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