Reference no: EM132765042

At May 31, 2018 the bank balance John's Stationary Supplies Ltd. was $28,795. The following discoveries were subsequently made:

1. The bank debited the bank statement with charges of $645 during May. This has not been recorded in the cash book

2. J. Pryce, a customer, transferred $12,500 into the business bank account. The bank made the transfer on 30 May, but no entry has been made in the cash book.

3. On 22 May, a cheque 225067 for $500 was payed to Ultra Ltd, however, this was mistakenly entered in the cash book on the debit side as $5,000.

4. Cheque number 543987, which was issued to a supplier, appears on the bank statement as $3,250. It was incorrectly recorded in the cashbook as $2,800.

5. During the last few days in May, cheques for $2,285 and $3,100 were lodged. On the bank statement, these entries were not included until on the 3rd of June.

6. Two cheques issued in May for $2,500 and $2,210, were not presented to the bank until after 31 May.

7. On May 21 a cheque for $1,380 was received from a customer. On May 29th, the cheque was dishonored, however, no adjustment was made in the cashbook.

8. Standing order payment of $2,000 was not recorded in the cash book

9. Payment for sundry expense of $350 was mistakenly recorded twice in the cash book

10. Cheque 1027654 for $7,000 was received, and erroneously recorded on the credit side of the cash book as $700.

11. Interest of $100 was credited in the bank statement but no entry was made in the cash book.

Problem 1: CALCULATE THE ADJUSTED CASH BOOK BALANCE

a. Credit Balance of $39,470

b. Debit balance of $49,445

c. Credit Balance of $49,445

d. None of the options

e. Debit Balance of $39,470