You are the bookkeeper of Holmes Traders. You undertake a bank reconciliation at the end of every

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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 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:

1 3 6 8 March March March March March AU Bank - Bank Statement For the period 01/03/2021-31/03/2021 Holmes Date March 3 LO 6 9 12 15 20 26 29 Holmes Traders' Book Records Deposits made $ 708 408 504 252 972 336 912

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.