Cindy, a new owner of a Chinese restaurant, is unable to reconcile the bank balance at January 31. Cindy’s reconciliation is as follows. LO6 Exercises 347 Compute inventory turnover and days in inventory.

(SO 9)

Determine correct income statement amounts.

(SO 8)

Identify the principles of internal control.

(SO 10)

Identify internal control weaknesses over cash receipts and suggest improvements.

(SO 10, 11)

Identify internal control weaknesses over cash disbursements and suggest improvements.

(SO 10, 12)

Cash balance per bank $3,660.20 Add: NSF check 630.00 Less: Bank service charge 25.00 Adjusted balance per bank $4,265.20 Cash balance per books $3,875.20 Less: Deposits in transit 490.00 Add: Outstanding checks 930.00 Adjusted balance per books $4,315.20 Instructions

(a) Prepare a correct bank reconciliation.

(b) Journalize the entries required by the reconciliation.