Problem 7-11 A Preparing a bank reconciliation and recording adjustments

CHECK FIGURE: 1. Adjusted book balance = $28,250

The following is information for Dundee Reality:

1. Balance per the bank statement dated October 31, 2020, is $26,830.
2. The balance of the Cash account on the company books as of October 31, 2020, is $5,575.
3. $14,680 of customer deposits were outstanding as of September 30; this amount has been deposited to Dundees account in October.
4. Cheques written in October that had not cleared the bank as of October 31 were:

#8700, $985

#8709, $12,600

#8801, $620

#8815, $145

5. The bank charged Dundees account for a $2,350 cheque of the E-Zone Networks; the cheque was found among the cancelled cheques returned with the bank statement.
6. Bank service charges for October amount to $65.
7. A customers cheque (Teresa Krant) for $7,050 had been deposited in the bank correctly but was recorded in the accounting records as $7,500.
8. Among the cancelled cheques in one for $260 given in payment of an account payable to Decker Company; the bookkeeper had recorded the cheque incorrectly at $620 in the company records.
9. The bank statement showed an electronic fund transfer of 22,880 for a customer payment. A bank service fee of $50 was charged.
10. A bank deposit of October 31 for $13,420 does not appear on the bank statement.

Required

1. Prepare a bank reconciliation statement as of October 31, 2020.
2. Prepare the necessary entries to make the Cash account agree with the bank reconciliation adjusted Cash balance as of October 31.

Analysis Component:

Identify the effects on the income statement and balance sheet if the entries in Part 2 were not recorded.