Kinte Products Limited had a balance in its cash account of $38,755 on October 31, 2011. This included $2,650 to cash receipts from October 31, which had not yet been deposited in the bank. On the same date, its bank account had a balance of $42,301. Comparing the bank statement with the company's records indicated that the following cheques were outstanding on October 31:
#1224……………………………..$1,991
#1230…………………………….. 1,336
#1232…………………………….. 2,286
$5,613
The following were shown on the bank statement and not yet recorded by the company:
• $376 deducted for a customer's cheque that was returned to Kinte Products marked NSF
• $420 added as a result of the direct deposit of a tax refund from the Canada Revenue Agency
• $1,200 added as a result of a note collected by the bank and deposited in the company's account, representing $1,000 of principal and $200 of interest
• $34 deducted for service charges for the month
In the process of preparing the data for its bank reconciliation, the company discovered that it had made an error in recording one of its deposits for cash sales during the month. The actual amount deposited was $2,282, but Kinte Products had recorded it as $2,882. The bank had also made an error in recording one of the company's cheques that was a payment to a supplier on account. The cheque had been issued in the amount of $336, but the bank processed it as $363.
Required:
a. Prepare a bank reconciliation for Kinte Products Limited as at October 31, 2011.
b. Prepare any journal entries required to adjust the cash account as at October 31.