Question 2 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: 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. 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.

Question 2 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: 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. 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.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter4: Internal Control And Cash

Section: Chapter Questions

Problem 20CE

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Question 2

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:

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.
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.

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