The following information is produced by comparing the cash deposits and withdrawals recorded by the M&N Windows Ltd for the month with their most recent bank statement received at 30 June 2019:
a. M&N Windows Ltd’ cash at bank ledger at 30 June 2019 is: $75,864
b. Credit balance as per bank statement as at 30 June 2019 is: $101,160
c. Bank statement shows an electronic transfer from a customer of $3,864
d. Deposits in transit, $12,540
e. Interest earned on bank account, $75
f. Unpresented cheques, $37,407
g. Service charge included in bank statement, $150
h. Cheque for insurance expense, $5,370 incorrectly recorded in books as $5,910
i. A dishonoured cheque written by a client Jim Smith, $3,900
The entity doesn’t use special journals for record keeping. The entity prepares bank reconciliation statement at the end of each month.
a) Prepare a bank reconciliation statement for M&N Windows Ltd at 30 June 2019.
b) Discuss why a bank reconciliation is still necessary even most of the transactions take place using electronic transfer of funds nowadays.
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