QUESTION TWO

a) On 4 April 2020 Kofi Ntam received his bank statements for the month ended 31 March

2020. The bank statement showed a balance of GH417,400 (overdraft) as at 31 March

whilst the cash book showed a balance of GH525,990 (credit) as at that date. Upon

examination of the cash book and the bank statement the following were discovered:

Bank charges of GH2,010 had not been recorded in the cash book. Kofi Ntam exceeded his overdraft limit during the month of March. The bank had therefore, charged a penalty of GH2,500. This has not been recorded in the cashbook.

A sum of GH12,500 had been wrongly credited to Kofi Ntams bank account by the

bank.

A cheque for GH12,300 had been returned by the bank as dishonored. As the cheque

had been dishonored, the bank charged Kofi Ntam GH150. This has not reflected in the

cashbook.

Cash receipts of GH37,400 were posted as cash payment of GH47,300 in the cash

book.

On 21 March, Kofi Ntam deposited an amount of GH6,500 into his personal bank

account. This was deposited to the business bank account in error by the bank. Standing orders and direct debits of GH 11,150 had not been posted to the cash book.

Customers had deposited GH21,700 directly to the bank account. This has not been

recorded in the cash book.

Receipts of GH51,200 deposited to the bank account on 31 March 2020, had not been

credited by the bank.

The following cheques, drawn on the bank account, had not been presented to

the for

payment as at 31 March 2020:

Cheque Number Date Cheque was Written GH

No.45280 11 March 2020 8,400

No 45350 28 March 2020 17,400

No 45370 31 March 2020 36,700

Required:

i) Prepare the adjusted cash book for the month of March 2020. (8 marks)

ii) Prepare a statement on 31 March 2020 reconciling the adjusted cash book with