Question 2 (10 marks)

Safe Security Doors Ltd. undertakes bank reconciliation at the end of each month before preparing its monthly financial statements. The following information is produced by comparing the cash deposits and withdrawals recorded by the business in July with their bank statement received for the month ending 31 July 2021:

1. The bank statement for the month of July shows a credit balance of $112,250 as at 31 July 2021.
2. Safe Security Doors Ltd.s cash at bank ledger account has a debit balance of $109,230 at 31 July 2021.
3. $7,850 cash received from a customer Adam on 30 July (invoice no. 211) and $11,045 cash received from another customer Brian on 31 July (invoice no. 213) are recorded in the entitys accounting record but are not shown in the bank statement.
4. Interest earned on bank account is $85.
5. Cheque no. 112 and 113 are not included in the bank statement.

# 112 $ 8,045

# 113 $ 6,950

6. Bank deducted transaction fees of $15 for an overseas transfer by the entity.
7. Safe Security Doors Ltd. incorrectly recorded a payment for advertising expenses as $2,300 in its record. The correct amount for the cheque issued is $3,200 instead.
8. A dishonoured cheque written by a customer Cindy Davis, $4,100.
9. Bank statement shows a direct electronic transfer from a customer of $11,850 that has not been recorded by the entity.

The business doesnt use special journals for record keeping. All transactions are recorded in the general journal and posted to ledgers immediately.

Required:

1. Prepare a bank reconciliation statement for Safe Security Doors Ltd as at 31 July 2021. You should show both the adjusted cash balance per book and per bank and also indicate clearly whether the balance is a debit or credit.