Mercury Pty Ltd received a bank statement from Westpac Bank showing a credit balance of $12,800, while Cash at Bank balance as per the companys record showed a debit balance of $11,552 on 31 January 2021. The following were discovered in an attempt to reconcile the two records:

1. The bank has collected $1,040 on the behalf of Mercury Pty Ltd for the note of $1,000, interest of $60, and the collection fee $20. Mercury Pty Ltd has not accrued any interest.

2. A deposit of $4,300 appears in the cash receipts journal but had not been recorded by the bank at 31 January 2021.

3. Cheques recorded in the cash payments journal but not yet presented to the bank for payment amounted to $5,300.

4. The bank statement showed a dishonoured cheque $750 that has been issued by a customer, Mr Mike, to Mercury Pty Ltd.

5. There was a bank fees of $60 in the bank statement.

6. On 20 January Mercury Pty Ltd issued cheque #980 for $357 to Mrs. Natalia on account. The cheque, which cleared the bank in January, was wrongly journalised and posted by Mercury Pty Ltd for $375.

Required

a. Prepare a bank reconciliation at 31 January 2021 based on the provided information. (4 marks)

a. Prepare journal to record the necessary adjusting entries at 31 January 2021 (5 marks). Narrations are not required.