The following information relates to the June 2020 cash transactions for Uruguay Ltd.

1. The following unpresented cheques (outstanding cheques) appeared on the 31^st May 2020 bank reconciliation:

Cheque no.

Amount ($)

6539

1,207.60

6548

3,605.00

6549

317.40

6555

575.60

6558

990.00

1. All cheques except for cheque no. 6558 are included in the 30^th June bank statement. On 31^st May, a deposit of $5,163.00 was outstanding.
2. In the company's records the cash balance at 31^st May was $39,659.56.
3. Total cash payments were $99,565.60 for the month of June.
4. Total cash receipts for June were $104,291.40, but $3,964.90 of these were received on 30^th June are outstanding as they have not yet been credited by the bank.
5. The bank statement at 30^th June shows a closing balance of $53,852.26.
6. The following information only appeared on the bank statement in June, service charges of $64.80; a $190.80 returned cheque due to insufficient funds in the drawer's account; and the 31^st May deposit of $5,163.00 which was credited by the bank on 1^st June.
7. Cheque no. 6585, written for telephone expenses on 20^th June, and recorded by the company at $1,978.00, was correctly paid by the bank as $1,996.00
8. The June bank statement shows a debit of $1,165.00 for a cheque which was not written by Uruguay Ltd, but which was incorrectly debited to their account by the bank.
9. The following cheques are included in the company's records but do not appear on the company's bank statement for June:

Cheque no.

Amount ($)

6598

574.80

6599

5,137.40

6614

4,181.20

6615

3,987.00

Required:

1.Prepare the cash bank account in the general ledger as a result of the adjustments required to balance the account to the bank statement for the month of June 2020.

(8 Marks)

2.Prepare the bank reconciliation as at 30^th June 2020. (6 Marks)

3.A manager of a small online business believes that because most of the transactions take place using electronic transfers instead of cash or cheques, the business no longer needs to do a bank reconciliation each month. Discuss. (4 Marks)