Prepare a bank reconciliation statement and explain the need for cash records The bank reconciliation made by Johnson Ltd on 31 August 2019 showed a deposit in transit of $570 and two outstanding...

Prepare a bank reconciliation statement and explain the need for cash records The bank reconciliation made by Johnson Ltd on 31 August 2019 showed a deposit in transit of $570 and two outstanding cheques: no. 597 for $260 and no. 603 for $180. The adjusted balance per books on 31 August was $7980 debit. The bank statement shown below is available for September. A list of deposits made and cheques written during September is shown here: Deposits made Cheques written $ $ Sept. 1 350 No. 607 450 4 420 608 325 8 296 609 192 12 580 610 285 16 404 611 410 24 535 612 242 29 256 613 214 30 430 614 453 3 271 615 357 616 262 3 190 The cash at bank account balance on 30 September was $8061. In reviewing the cheques, the bookkeeper discovered that cheque no. 610, written for $258 for a repairs expense, was recorded in the cash payments journal as $285. The ‘return’ item for $335, which Johnson deposited on 24 September, was a payment on account from customer D. Lewis (dishonoured cheque) Bank statement Johnson Ltd Newtown, NSW DR CR 30 September 2019 $$ $ 31 Aug. Brought forward 7 850 CR 1 Sept. Cash/cheques 570 8 420 CR 603 180 8 240 CR 2 Sept. Cash/cheques 350 8 590 CR 5 Sept. Cash/cheques 420 9 010 CR 608 325 8 685 CR 607 450 8 235 CR 8 Sept. 610 258 7 977 CR 9 Sept. 609 192 7 785 CR Cash/cheques 296 8 081 CR 15 Sept. Cash/cheques 580 8 661 CR 612 242 8 419 CR 17 Sept. Cash/cheques 404 8 823 CR 611 410 8 413 CR 25 Sept. 614 453 7 960 CR Cash/cheques 535 8 495 CR 30 Sept. Cash/cheques 256 8 751 CR Return 335 8 416 CR Bank fee 15 8 401 CR 1 Prepare a bank reconciliation statement for Johnson Ltd at 30 September. 2 Prepare the necessary general journal entries to bring the cash at bank account up to date as at 30 September 2019. 3 Could a business dispense with its own cash records and rely entirely on bank statements?