Question - The De Lange Ltd's bank statement for the month of December showed a balance per bank of $14,000 CR. The company's Cash account in the general ledger had a balance of $11,318 DR at 30 November. Other information is as follows:
(1) Cash receipts for 31 December recorded on the company's books were $10,400 but this amount does not appear on the bank statement.
(2) The bank statement shows a debit for $80 for cheque printing charges.
(3) Cheque No. 119 payable to Black Company was recorded in the cash payments journal and cleared the bank for $496. A review of the accounts payable subsidiary ledger shows a debit entry for $946.
(4) The total amount of cheques still outstanding at 31 December amounted to $11,600.
(5) Cheque No. 138 was correctly recorded by the bank for $818. The cash payment journal reflects an entry for Cheque No. 138 as a debit to Accounts Payable and a credit to Cash in Bank for $980.
(6) The bank returned a dishonoured cheque from a customer for $1,120.
(7) The bank included a credit for $2,520, which represents collection of a customer's note by the bank for the company; principal amount of the note was $2.400 and interest was $120. Interest has not been accrued.
Required:
(a) Prepare the bank reconciliation statement for De Lange Ltd at 31 December.
(b) Prepare the cash at bank ledger account for De Lange Ltd at 31 December.
(c) Describe the five basic principles of cash management.