The cash balance per books for Farhan Company on September 30, 2012 is $10,740.93. The following checks and receipts were recorded for the month of October, 2012:

Checks Receipts

No. Amount No. Amount Amount Date

17 $372.96 22 $ 578.84 $843.86 10/ 5

18 $780.62 23 $1,687.50 $941.54 10/21

19 $157.00 24 $ 921.30 $808.58 10/27

20 $587.50 25 $ 246.03 $967.00 10/30

21 $234.15

In addition, the bank statement for the month of October is presented below:

Balance Deposits and Credits Checks and Debits Balance

Last Statement No. Total Amount No. Total Amount This Statement

$5,404.84 5 $9,178.36 10 $3,632.19 $10,951.01

Checks and other debits Deposits Date Balance

No. Amount No. Amount No. Amount

14 148.29 17 372.96 22 578.84 5,484.38 10/ 1 $9,875.31

18 708.62 24 921.30 843.86 10/ 8 $9,219.03

19 157.00 25 246.03 941.54 10/23 $9,541.58

21 234.15 25.00 SC 808.58 10/29 $10,101.01

240.00 NSF 1,100.00 CM 10/31 $10,951.01

Symbols: NSF (Not sufficient funds) SC (Service charge) CM (Credit Memo)

Check No. 18 was correctly written for $708.62 for a payment on account. The NSF check was from Samer, a customer, in settlement of an accounts receivable. An entry had not been made for the NSF check. The credit memo is for the collection of a note receivable including interest of $60 which has not been accrued. The bank service charge is $25.00.

Instructions

(a) Prepare a bank reconciliation at October 31.

(b) Prepare the adjusting journal entries required by the bank reconciliation