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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

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 entitys records was $7087 debit at the end of February.

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

AU Bank - Bank Statement

For the period 01/03/2021 31/03/2021

Holmes Traders, NSW

Dr

Cr

Balance $

Balance brought forward

6931

CR

1

March

Deposit

780

7711

CR

3

March

Deposit

708

8419

CR

March

Cheque # 582

312

8107

CR

6

March

Deposit

408

8515

CR

8

March

# 571

420

8095

CR

9

March

Deposit

504

8599

CR

12

March

Deposit

252

8851

CR

March

# 584

420

8431

CR

13

March

# 583

1020

7411

CR

15

March

Deposit

972

8383

CR

March

# 587

888

7495

CR

20

March

Deposit

336

7831

CR

22

March

# 585

816

7015

CR

26

March

Deposit

912

7927

CR

29

March

# 586

756

7171

CR

30

March

# 580

516

6655

CR

31

March

interest

23

6678

CR

31

March

Transaction fees

13

6665

CR

Holmes Traders Book Records

Date

Deposits made

Cheques written

$

No.

$

March

3

708

# 579

288

6

408

# 580

516

9

504

# 581

414

12

252

# 582

312

15

972

# 583

1020

20

336

# 584

420

26

912

# 585

816

29

756

# 586

432

$ 4848

# 587

888

$ 5106

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:

  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 March 2021. (3 marks)
  2. Prepare 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. (6 marks)

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