1. Prepare Durkin Automotive's bank reconciliation at January 31, 2021. 2. Prepare the journal entries required at January 31, 2021. 3. Describe how a bank account and the bank reconciliation help the general manager control Durkin Automotive's cash. Cash Account No. 101 Date Item Jrnl. Ref. Debit Credit Balance Balance 7,900 January 1 30 CR 6 9,623 17,523 30 CP 11 10,064 7,459 Cash Receipts (CR) Cash Payments (CP) Date Cash Debit Check No. Cash Credit 3113 $ 1,524 January 2 $ 8 2,780 600 3114 1,874 10 3115 1,630 1,615 866 16 3116 94 22 394 3117 776 29 3118 139 923 2,445 30 3119 465 $ Total 9,623 3120 3121 1,048 180 2,334 3122 $ 10,064 Total $ 7,900 Bank Statement for January 2021 Beginning balance Deposits and other additions: January 1 650 EFT 2,780 4 9 12 600 1,615 866 17 22 394 23 1,200 BC 8,105 Checks and other deductions: January 7 $ 1,524 13 1,360 14 474 US 15 18 21 1,874 94 313 EFT 776 26 30 139 30 30 SC (6,584) $ 9,421 Ending balance Explanation: BC-bank collection of note receivable from customer, EFT - electronic funds transfer, US - unauthorized signature, SC -service charge a. Additional data for the bank reconciliation include the following: The EFT deposit was a receipt of monthly rent. The EFT debit was a monthly insurance payment. b. The unauthorized signature check was received from a customer and returned by the bank unpaid. The correct amount of check number 3115, a payment on account, is $1,360. (Durkin Automotive's accountant mistakenly recorded the check as $1,630.) C. Durkin Automotive Bank Reconciliation January 31, 2021 Bank: Balance, January 31, 2021 Add: Deposits in transit Subtotal Less: Outstanding checks: Check No. Adjusted bank balance, January 31, 2021 Books: Balance, January 31, 2021 Add: EFT collection of rent Bank collection of note receivable Correction of book error Subtotal Less: EFT payment of insurance Unauthorized signature check Service charge Adjusted book balance, January 31, 2021 Requirement 2. Prepare the journal entries required at January 31, 2021. (Record debits first, then credits. Exclude explanations from all journal entries.) Record the EFT deposit. Journal Entry Date Accounts Debit Credit Jan 31 Record the bank collection of note receivable. Journal Entry Date Accounts Debit Credit Jan 31 Record the correction for check #3115. Journal Entry Date Accounts Debit Credit Jan 31 Record the EFT debit. Journal Entry Date Accounts Debit Credit Jan 31 Record the unauthorized signature (US) check returned by the bank. Journal Entry Date Accounts Debit Credit Jan 31 Finally, record the bank service charge. Journal Entry Date Accounts Debit Credit Jan 31 Requirement 3. Describe how a bank account and the bank reconciliation help the general manager control Durkin Automotive's cash. A bank account helps control cash by: (Select all statements that apply. If an input field is not used in the ble, leave the field empty; do not select a A bank reconciliation helps control cash by: (Select all statements that apply. If an input field is not used in the table, leave the field empty; do not select a label.)
