Question
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:
- 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)
- 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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