Reference no: EM132747032

Question - You have collected the following information by comparing the accounting records of Ezytravel with their bank statement as at 30 June 2020.

i. Cash account on 30 June 2020 was a debit balance of $9,529.

ii. The bank statement at 30 June 2020 has a credit balance of $12,175.

iii. Deposits not recorded in the bank statement, $1,800.

iv. Cheques were not presented to the bank for payment at 30 June 2020, $5,795.

v. Bank charges on the bank statement, $50.

vi. A credit for an electronic transfer from a customer for $1000 in the bank statement.

vii. Interest earned of $15 on a term deposit recorded on the bank statement.

viii. Dishonoured cheque of $2,250 on the bank statement.

ix. Bank erroneously charged to Ezytravel account a personal cheque for $100, written by Bill Jones, the owner of Ezytravel.

x. Cheque for $1,326 was correctly paid by the bank but Ezytravel recorded the cheque amount as $1,362.

Required -

a. Prepare the bank reconciliation statement at 30 June 2020 for Ezytravel.

b. Although the process of bank reconciliation provides a measure of control over cash in a business entity, bank reconciliation is useless unless it operates within a good internal control accounting system. Briefly discuss this statement.