Using your answer to (a) above, calculate the cash balance.

Steps to Solve

1. Enter the Cash Purchases List the cash purchases based on the data for Mendip plc. The net amount is £315, VAT is £63, and the gross amount is £378.

   Cash Purchases Entry:

   • Cash: £378 (the gross amount)

2. Enter the Trade Payables List the trade payables for the suppliers paid by cheque. Add the amounts for Landa Ltd (£1,950) and Bebe and Co (£726).

   Trade Payables Entry:

   • Bank: £1,950 (Landa Ltd)
   • Bank: £726 (Bebe and Co)

3. Calculate Total for Each Column Now we will total each column in the credit side of the cash book:

   • Cash Total:

     • Total Cash = £378

   • Bank Total:

     • Total Bank = £1,950 + £726 = £2,676

   • VAT Total:

     • Total VAT = £63

   • Trade Payables Total:

     • Total Trade Payables = £1,950 + £726 = £2,676

   • Cash Purchases Total:

     • Total Cash Purchases = £378

4. Balance Calculation Using the previously provided cash balance of £2,312 and calculating the net balance after the new entries:

   Net Cash Calculation:

   • New Cash Balance = Previous Cash Balance + Cash Received - Cash Paid
   • Cash Received = £319
   • Cash Paid = £378

   So, the calculation will be: $$ \text{New Cash Balance} = 2312 + 319 - 378 $$ $$ \text{New Cash Balance} = 2312 + 319 - 378 = 2253 $$