You are the bookkeeper of Holmes Traders. You undertake a bank reconciliation at the end of every month. Holmes Traders received its bank statement for the month ending 31 March 2021. The bank reconciliation at the end of February showed a deposit in transit of $780 and two outstanding cheques (no. 563 for $204 and no. 571 for $420). The adjusted cash balance in the entity's records was $7087 debit at the end of February. 

 

Below are the entity's March bank statement and the entity's book records that indicate the deposits made and cheques written during the month of March:

  

The cash at bank account balance on 31 March was $6829. 

In reviewing cheques, a mistake was discovered: Cheque no. 586, written for insurance expenses of $756, was recorded in the general journal as $432.

Required:

a)  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 March 2021.

b) Generate a bank reconciliation statement for Holmes Traders at 31 March 2021. Please ensure you indicate the balance of each amount with either a debit or credit in the bank reconciliation statement. 

1 3 6 8 March March March March March AU Bank - Bank Statement For the period 01/03/2021-31/03/2021 Holmes Traders, NSW Dr Cr Balance brought forward Deposit Deposit Cheque # 582 Deposit # 571 9 March Deposit 12 March Deposit March # 584 13 March # 583 15 March Deposit March # 587 20 March Deposit 22 March # 585 26 March Deposit 29 March # 586 30 March # 580 31 March interest 31 March Transaction fees 312 420 420 1020 888 816 756 516 13 780 708 408 504 252 972 336 912 23 Balance $ 6931 7711 8419 8107 8515 8095 8599 8851 8431 7411 8383 7495 7831 7015 7927 7171 6655 6678 6665 CR CR CR CR CR CR CR CR CR CR CR % % % % % % CR CR CR CR CR CR CR CR