Question
Shown below is the information needed to prepare bank reconciliation for Mandy Company on 31 October 2019: (1) The cash ledger account showed a balance
Shown below is the information needed to prepare bank reconciliation for Mandy Company on 31 October 2019:
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(1) The cash ledger account showed a balance of $8,510, while the bank statement indicated a cash balance of $12,390.
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(2) The bank statement showed $45 interest earned for the month of October.
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(3) ZYX company settled its notes payable by depositing $4,000 directly into Mandys bank
account.
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(4) The company issued three checks totaling $1,000, which had not been shown in the bank
statement in October.
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(5) A $300 check mailed to the bank for deposit had not reached the bank on 31 October.
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(6) A $710 deposit to Manning Company was erroneously credited to Mandys account by the bank.
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(7) The bank returned a customers NSF check for $575 received as payment of an account
receivable.
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(8) A $2,500 check received from a tenant for rental revenue was recorded as $3,500 in the book.
Required:
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(a) Prepare bank reconciliation for the month of October 2019. (12 marks)
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(b) Prepare the necessary journal entries to update the accounting records. (6 marks)
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