BANK RECONCILIATION PROBLEM:

The Fitzgerald Company maintains a checking account at the Bank of the North. The bank provides a bank statement along with canceled checks on the last day of each month. The October 31, 2018, bank statement included the following information:

Balance, October 1, 2018$ 32,690

Deposits86,000

Checks processed(75,200)

Service charges(350)

NSF checks(1,600)

Monthly loan payment deducted

directly by bank from account

(includes $400 in interest)(3,400)

Balance, October 31, 2018$ 38,140

The company's general ledger cash (checking) account had a balance of $42,544 at the end of October. Deposits outstanding totaled $4,224, and all checks written by the company were processed by the bank except for those totaling $5,620. In addition, a check for $500 for the purchase of office furniture was incorrectly recorded by the company as a $50 disbursement. The bank correctly processed the check during October.

Required:

1.Prepare the bank reconciliation on the Form Provided for the month of October, 31, 2018.

2.Prepare the necessary journal entries at the end of Octoberon the Journal Paper provided to adjust the general ledger cash account.