QUESTION TWO At the end of each month, Sarah prepares a bank reconciliation statement for her business bank account. At 31* May 2020 her bank statement showed that she had funds of GHC393 at the bank. She has the following information: (i) The bank debited Sarah's account with charges of GHC387 during May. Sarah has not recorded these charges. Sarah arranged for GH7,500 to be transferred from her personal bank account into the business bank account. The bank made the transfer on 30 May, but Sarah has not made any entry for it in her records (iii) On 22nd May, Sarah withdrew GHC300 cash which she did not record. (iv) Cheque Number 4562980, which Sarah issued to a supplier, appears on the bank statement as GHC1,950. Sarah incorrectly recorded the cheque as GHC1,680. (v) On 31" May, Sarah lodged GHC1,371. On the bank statement, this amount is dated 3rd June (vi) Sarah was advised by the bank that she earned GHC156 interest for the period in May that her account was in credit. Sarah recorded this in May, but the bank did not credit her account until June. (vii) Three of the cheques issued in May, with a total value of GHC2,826 were not debited on the bank statement until after 31* May. (viii) A cheque for GHC828 issued to a supplier was cancelled but Sarah has not recorded the cancellation of the cheque. Required: (a) Show the bank account in Sarah's general ledger, including any adjusting entries required due to the information given. (7 marks) (b) Prepare a reconciliation of the bank statement balance to the corrected balance on the bank account in Sarah's general ledger. (3 marks) (c) Discuss five items that account for the differences between the cashbook balance and bank statement balance. (5 marks) TOTAL: 15 MARKS