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Red Company received the following October 31, 20X3, bank statement: Transactions Balance $18,000 $40,000 58,000 2,520 60,520 Balance, September 30 Deposits recorded during October Customer
Red Company received the following October 31, 20X3, bank statement: Transactions Balance $18,000 $40,000 58,000 2,520 60,520 Balance, September 30 Deposits recorded during October Customer note collected for Red Company (including $120 interest) Cheques cleared during October NSF cheque (given to Red by a customer) Bank service charges Balance, October 31 38,300 100 22,220 22,120 22,105 22,105 15 The cash account reflected the following for October: September 30 balance October cash deposits October cheques written October 31 balance CASH ACCOUNT $20,500 38,000 $38,600 $19,900 The September 30 bank reconciliation showed: Deposits in transit, $3,000, and outstanding cheques, $500. Required: A. What was the amount of the deposits in transit at October 31? B. What was the amount of outstanding cheques at October 31? C. Prepare a bank reconciliation for October. Use the following format: Book Balance of Cash $ Bank Statement Balance Additions Additions Deductions Deductions Correct Cash Balance $ Correct Cash Balance $ D. Give the journal entries that should be made by Red Company based on the bank reconciliation
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