Torme Publishing Ltd received the monthly bank statement for 31 August 2010. The statement shows an ending balance of €297 500.

The statement lists a deposit of €15 000 during the month which as a payment made directly to the bank by electronic funds transfer. The bank also charged a service fee of €120 for August as well as a €90 fee for printed checks. In addition, two checks totaling €6 500 from customers were returned for non-payment due to insufficient funds.

Torme’s accountant reconciling the bank account noticed that two checks totaling €31 000 were outstanding and a deposit make on 31 August for €17 880 was still in transit. The cash ledger account has a balance of €289 140.

However, the accountant noticed that a cash disbursement for €14 500 had been mistakenly recorded for €1 450 in the cash ledger account.

Required: Calculate the true cash balance for Torme Publishing on 31 August 2010. Make the journal entries necessary as the result of the reconciliation.LO1.