Answer:
Balance as per cash book $ 8,445
Adjustments to be recorded in cash book
Less: Bank Service Fees $ ( 310)
Add: Note receivable $ 6,600
Add: Interest earned <u>$ 1,120</u>
Adjusted cash balance <u>$ 15,855</u>
Balance as per bank statement $ 12,895
Add: Deposits in transit ( $ 74,640 - $ 71,375) $ 3,265
Less: Unpresented cheques ( $ 72515- 71270) $ (1,245)
Add: Correction of error <u>$ 940</u>
Adjusted bank balance $ 15,855
Explanation:
For cash book, the adjustments that have to be recorded are the bank service fees, collection of notes and interest.
For bank statements, the adjustments that have to be recorded are the deposits in transits ( collections not deposited). unpresented cheques ( cheques issued but not presented) and the correction of the wrong entry.
