Answer:
Balance as per cash book $ 20,621
Less: Debit memorandum $ ( 22)
Add: Interest earned on bank balance $ 34
Add: Correction of error <u>$ 9</u>
Adjusted balance per cash book $ 20,642
Balance as per bank statement $ 19,791
Add: Deposits in Transit $ 3,333
Less: Outstanding checks <u>$ ( 2,482)</u>
Adjusted balance per bank statement $ 20,642
Explanation:
The debit memorandum from the bank has to be adjusted from the cash book. This is only known from the bank statement
The interest earned on the bank balance is only known from the bank statement and has to be adjusted in the cash book
The correction of error needs to be corrected in the cash book.
The deposits in transit have been recorded in the cash book so no adjustment is needed there. The money has not been deposited so the bank statement balance has to be added thereto,
The checks issued by the Company, have been properly recorded in the cash book, however, since the checks have not been encashed the bank balance needs to be reduced to reconcile the balance.
