BOBO Corporation received its August 31 bank statement showing total funds on deposit of K288, 090.09. This amount was K149, 158.22 in excess of the balance in the general ledger Cash account. Additional information consists of the following: 1.The company has a 1-year, K100, 000, certificate of deposit (CD). This amount is included in the total funds listed on the bank statement. BOBO classifies this security in a separate investment account in its general ledger. 2.Interest earned on the CD was K475 during the month. This interest is free for withdrawal and is automatically posted to the regular checking account. BOBO's first notification of the amount of interest for the month is via the bank statement, and the interest income has not yet been recorded in the general ledger Cash account. 3.BOBO Corporation received a K50, 000 bank draft for an oil and gas lease from XTX Exploration. This draft was presented to the bank in early July. Drafts are not cash until the maker (XTX) honors them (at their option), and this process can take as long as several weeks. The bank statement included

notification that XTX had honored and funded the draft in mid-August. This is the first notification to BOBO of actual funding, and BOBO has not previously recorded this transaction. 4.BOBO made a deposit late in the afternoon of August 31. The amount of the deposit was K3, 666.04, but this amount did not appear on the August 31 bank statement. The bank has a sign in its lobby that says "Deposits after 3 pm will be processed on the next following business day." 5.BOBO has authorized automatic payments to its utility company for monthly charges. Withdrawals of K1, 445.99 appear in the bank statement for such utilities. This is the first notification to BOBO, and BOBO has not previously recorded this transaction. 6.Late in August, BOBO did an online authorization for a credit card company payment. Due to a timing issue, the bank statement does not yet reflect the payment for K4, 446.09. BOBO has appropriately recorded the reduction in cash in the general ledger. 7.BOBO prepared a K3, 000 payments to Sims via cheque #12234. Due to a bookkeeping error, Sims reported that it had not received payment. BOBO issued a K3, 000 replacement cheque #12257. Both cheques cleared the bank in August, and Sims has admitted its error. Sims will be returning K3, 000 to BOBO. 8.The bank statement included monthly service charges of K125. BOBO has not previously recorded these charges. 9.At the end of July, three cheques were outstanding (#12170, K245.55; #12200, K1, 889.66; and #12202, K75). At the end of August, three cheques were outstanding (#12170, K245.55; #12290, K1, 333.07, and #12291, K1, 117.54).(a) Prepare BOBO's bank reconciliation as of August 31, 20X5. [15 MARKS] (b) What is the correct balance for Cash in the August 31 balance sheet? [5 MARKS]