P5-71B. (Learning Objective 3: Using the bank reconciliation as a control device) The cash data of Dudley Automotive for January 20X6 follow:

Dudley received the following bank statement on January 31, 20X6:

Additional data for the bank reconciliation include the following:

a. The EFT deposit was a receipt of monthly rent. The EFT debit was a monthly insurance expense.

b. The unauthorized signature check was received from a customer.

c. The correct amount of check number 3115, a payment on account, is €1,350. (Dudley’s accountant mistakenly recorded the check for €1,530.)
Requirements 1. Prepare the Dudley Automotive bank reconciliation at January 31, 20X6.
2. Describe how a bank account and the bank reconciliation help the general manager control Dudley’s cash.

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Cash Account No. 101 Date Item Jrnl. Ref. Debit Credit Balance Jan. 1 Balance 7,200 31 CR 6 9,156 16,356 31 CP 11 10,023 6,333 Cash Receipts (CR) Cash Payments (CP) Date Cash Debit Check No. Cash Credit Jan. 2 $2,726 3113 $ 1,475 8 572 3114 1,925 10 1,647 3115 1,530 16 837 3116 32 22 436 3117 870 29 865 3118 132 30 2,073 3119 483 Total $9,156 3120 995 3121 249 3122 2,332 Total $10,023