Reference no: EM132889487

Assume that you are working as an Accounts Mange in Prime Limted, a company carrying a business of Accounting Software Implementation. At the end of the month of June 2019, you found that the bank book reflected as favourable balance of £ 34,000 while the bank statement showed an overdraft of £ 171,200.

On examination of the two records, the following discoveries were made:

i Cheque of £ 32,500 issued to contractors were not yet presented to the bank.
ii Bank made payment of £ 3,500 in relation to e-payment charges on Prime Limited's account.
iii Prime Limted had instructed the bank to transfer interest of £ 4,500 earned on a deposit account to its current account. The bank did not transfer the amount till 15 July 2019 whereas the amount had already been recorded in the bank book.
iv Cheque of £ 63,000 received from customers and deposited to the bank had not been credited by the bank.
v The receipt side of the bank book was overcated by £ 9,000
vi The payment side of the bank book was undercasted by £ 4,200
vii Prime Limited made e-payments of £ 72,000 to overseas contractors. However, these payments were not posted to the bank book.
viii A cheque of £ 3,000 drawn in favour of a contractor was recorded in the bank statement as £ 30,000
ix A cheque of £ 6,500 issued to one of the contractors had been entered twice in the bank book.
x Dividend of £ 5,400 collected by the bank was recorded at £ 6,300 in the bank book. xi A standing order for payment of annual subscription fees of £ 2,000 for a magazine had not been recorded in the bank book.

Problem 1: So, you are required to determine the correct balance that should be reported in the bank book and make a bank reconciliation statement reconciling the amended balance with that shown in the bank statement.