Lowak Ltd operates two bank accounts with its banker, account number 1 and account number 2. as at 31 March 2022 the balances as per the bank statement and the cash book were as follows:
AccountBalance as per bank statementBalance as per cash book
Sh.Sh.
Number 1323,600(Cr)34,000(Dr)
Number 2156,400(Dr)277,600(Dr)
Investigations revealed the following:
Cheques lodged but not yet credited:
Sh.
Account No. 180,000
Account No. 256,000
Cheque No.F301 for Sh. 8,000 deposited into account No. 2 was dishonoured but this has not been reflected in the cash book.
A cheque No. M420 for Sh. 8,800 paid direct into bank account No. 1 has not been recorded in the cash book.
A cheque No. K341 for Sh. 6,400 was deposited into account No. 2 but this was wrongly recorded in the cash book as Sh. 8,000
A cheque No. A210 for Sh. 29,200 paid out from account No. 1 and recorded as such in the cash book was erroneously paid out of account No. 2 by the bank.
A cheque No. B308 for Sh 12,800 paid out from account No. 2 was erroneously entered in account No. 1 in the cash book.
A transfer of Sh. 400,000 from account No. 1 to account No. 2 had been entered in the cash book but the bank had not been instructed to effect the transfer.
A standing order payment of Sh. 4,000 from account No. 2 had not been recorded in the cash book.
A cheque No. B348 for Sh. 8,400 paid from account No. 2 was incorrectly entered in the cash book as Sh. 4,800.
Bank charges not yet entered in the cash book are Sh. 1,200 for account No. 1 and Sh. 1,600 for account No. 2.
A cheque of No. D720 for Sh. 80,000 received in respect of account No. 2 and subsequently credited to account No. 2 by the bank, was incorrectly entered in account No. 1 in the cash book.
A cheque No. H781 for Sh. 7,200 received in respect of account No. 2 was incorrectly recorded in the cash book as Sh. 6,800.
There was an unpresented cheque of Sh. 2,400 in respect of account No. 2.
Required:
Adjusted cash book for each of the two accounts.
Bank reconciliation statement for each of the two accounts, for the month of March 2022.
