Bank reconciliation statement AAA Limited received its bank statement for the month ending 30 June, and reconciled the statement balance to the 30 June balance in the cash account. The reconciled balance was determined to be $5000. The reconciliation included the following items:

a Deposits in transit were $2000.

b Outstanding cheques totalled $3000.

c Interest revenue of $30 was shown on the bank statement.

d An NSF cheque from a customer for $400 was included on the bank statement. The firm had not been previously notified that the cheque had been returned for insufficient funds.

Required:

1 What was the balance in AAA Limited’s cash account before recognising any of the above reconciling items?

2 What was the balance shown on the bank statement before recognising any of the above reconciling items?

3 Prepare any necessary adjusting journal entries.