You have recently been employed in a medium size company and deployed in the accounts department.
Your head of section has given you the following extract from the cashbook for the month of February 2021:
Sh. Sh.
Receipts during the month 2,938,000 Balance brought forward (1.2.2021) 1,522,000
Balance carried forward (28.2.2021) 1,108,000 Payments during the month 2,524,000
4,046,000 4,046,000
The head of section further informs you that all receipts are banked intact and all payments are made by cheque. On investigation, you discover the following:
1. Bank charges and commissions amounting to Sh. 272,000 entered on the bank statement had not been entered in the cashbook.
2. Cheques drawn amounting to Sh. 534,000 had not been presented to the bank for payment.
3. Cheques received totaling Sh. 1,524,000 had been entered in the cashbook and paid into the bank, but had not been credited by the bank until March 2021.
4. A cheque for Sh. 44,000 had been entered as a receipt in the cashbook instead of a payment.
5. A cheque for Sh. 50,000 had been debited by the bank by mistake.
6. A cheque received for Sh. 160,000 had been returned unpaid. No adjustment had been made in the cashbook.
7. All dividends receivable are credited direct to the bank account. During the month of February 2021. Dividends totaling Sh. 124,000 were credited by the bank and no entries had been made in the cashbook.
8. A cheque drawn for Sh. 12,000 had been incorrectly entered in the cash book as Sh. 132,000.
9. The balance brought forward should have been Sh. 1,422,000.
10. The bank statement as at 28 February 2021 showed on overdraft of Sh. 2,324,000.
Required:
(i) The adjusted cashbook as at 28 February 2021 (4 marks)
(ii) Bank reconciliation statement as at 28 February 2021. (6 marks)