BANK RECONCILIATION Tiny Corp. prepares monthly bank reconciliations of its checking account balance. The bank statement for October 2009 indicated the following:

Balance, October 31, 2009 $7,920 Service charge for October 20 Interest earned during October 30 NSF check from Green Corp. (deposited by Tiny) 32 Note ($1,000) and interest ($40) collected for Tiny from a customer 1,040 An analysis of canceled checks and deposits and the records of Tiny revealed the following items:

Checking account balance per Tiny’s books $7,170 Outstanding checks as of October 31 952 Deposit in transit at October 31 1,310 Error in recording a check issued by Tiny. (Correct amount of the check is $450, but was recorded as a cash disbursement of $540. The check was issued to pay for merchandise originally purchased on account.)

90 Required:

. Prepare a bank reconciliation at October 31, 2009, in proper form.

. Record any necessary adjusting journal entries.

Cornerstone Exercise