On 31 May 2019 Continental Pty Ltd had a cash balance as per the company records of $10,949 debit. The bank statement on that date showed a credit balance of $15,569.20.

A comparison of the bank statement with the cash account revealed the following facts:

The bank statement included a debit entry of $120 for the printing of additional company cheques.

Cash sales of $1,672.30 on 12 May were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $1,692.30. The bank credited Continental Pty Ltd for the correct amount.

Unpresented cheques at 31 May totalled $2,552.50 and the outstanding deposits were $1,672.30.

A $6,000 note receivable was collected by the bank for Continental Pty Ltd on 31 Mayplus $160 interest. The bank charged a collection fee of $40.

Included with the cheques paid was a cheque issued by Telfer Pty Ltd to P. Jones for $1,200 that was incorrectly charged to Continental Pty Ltd by the bank.

On 18 May Continental Pty Ltd issued cheque number 1181 for $1,370 to a account payable o account. The cheque, which cleared the bank in May, was incorrectly journalised and posted by Continental Pty Ltd for $1,730.

On 31 May the bank statement showed a dishonoured cheque of $1,400 that had been issued by W. Hoare, a customer to Continental PtyLtd. Required:

a. Prepare the bank reconciliation as at 31 May 2019 and calculate the cash at bank account of Continental Pty. Ltd. At 31 May 2019. General journal entries are not required for this question.

b. The manager of Continental asks why bank reconciliations are still required to be completed as cash transactions are increasingly taking place by electronic transfer. Explain to the manager why a bank reconciliation is still necessary for the business