QUESTION 02 (11 marks)

On May 31, 2020, Cullen Company had a cash balance per books of $14,000. The bank statement showed a balance of $42,500 on that day. A comparison of the statement with the Cash account revealed the following facts.

01. A $ 14,500 cheque which was deposited on 30/05/2020 was not recorded in the bank statement.

02. A $50,000 note receivable was collected by the bank.

03. Two cheques for $15,000 and $20,000 which were issued for suppliers were not presented to the bank yet.

04. A $32,000 cheques which was received by a customer was deposited in the bank on 26/05/2020 has been bounced.

05. The statement included a Debit memo $500 and a standing order payment $9,500 for a life Insurance.

(a) Show the adjusted bank balance as per books as at 31/05/2020. (8 marks)

(b) Prepare the bank reconciliation for the month of May. (3 marks)