Question 2 (9 marks)

You are the bookkeeper of Holmes Renovations. You undertake a bank reconciliation at the end of every month. Holmes Renovations received its bank statement for the month ending 31 July 2021. The bank reconciliation at the end of last month showed a deposit in transit of $14,040 and two outstanding cheques (no. 363 for $3,672 and no. 371 for $7,560). The adjusted cash balance in the entitys records was $127,566 debit at the end of June.

Below are the entitys July bank statement and the entitys book records that indicate the deposits made and cheques written during the month of July:

AU Bank - Bank Statement For the period 01/03/2021 31/03/2021 Holmes Traders, NSW
			Dr	Cr	Balance $
		Balance brought forward			124,758	CR
1	July	Deposit		14,040	138,798	CR
3	July	Deposit		12,744	151,542	CR
	July	Cheque # 382	5,616		145,926	CR
6	July	Deposit		7,344	153,270	CR
8	July	# 371	7,560		145,710	CR
9	July	Deposit		9,072	154,782	CR
12	July	Deposit		4,536	159,318	CR
	July	# 384	7,560		151,758	CR
13	July	# 383	18,360		133,398	CR
15	July	Deposit		17,496	150,894	CR
	July	# 387	15,984		134,910	CR
20	July	Deposit		6,048	140,958	CR
22	July	# 385	14,688		126,270	CR
26	July	Deposit		16,416	142,686	CR
29	July	# 386	13,608		129,078	CR
30	July	# 380	9,288		119,790	CR
31	July	interest		414	120,204	CR
31	July	Transaction fees	234		119,970	CR

Holmes Renovations Book Records
Date		Deposits made	Cheques written
		$	No.	$
July	3	12,744	# 379	5,184
	6	7,344	# 380	9,288
	9	9,072	# 381	7,452
	12	4,536	# 382	5,616
	15	17,496	# 383	18,360
	20	6,048	# 384	7,560
	26	16,416	# 385	14,688
	29	13,608	# 386	7,776
		$ 87,264	# 387	15,984
				$ 91,908

The cash at bank account balance on 31 July was $122,922.

In reviewing cheques, a mistake was discovered: Cheque no. 386, written for supplies expenses of $13,608, was recorded in the general journal as $7,776.

Required:

1. As the entity does not use special journals, prepare the necessary general journal entries to bring the cash at bank account up to date as at 31 July 2021. (3 marks)
2. Prepare a bank reconciliation statement for Holmes Renovations at 31 July 2021. Please ensure you indicate the balance of each amount with either a debit or credit in the bank reconciliation statement. (6 marks)