Question
The cash data of Duffy Automotive for May 2018 follow: Duffy Automotive received the following bank statement on May 31, 2018: Additional data for the
The cash data of Duffy Automotive for May 2018 follow:
Duffy Automotive received the following bank statement on May 31, 2018:
Additional data for the bank reconciliation include the following:
a. The EFT deposit was a receipt of monthly rent. The EFT debit was a monthly insurance payment.
b. The unauthorized signature check was received from a customer and returned by the bank unpaid. c. The correct amount of check number 3115, a payment on account, is $1,390. (Duffy Automotives accountant mistakenly recorded the check as $1,930.)
Requirements
1. Prepare Duffy Automotives bank reconciliation at May 31, 2018.
2. Prepare the journal entries required at May 31, 2018.
3. Describe how a bank account and the bank reconciliation help the general manager control Duffy Automotives cash.
Cash Account No. 101 Date Item Jrnl. Ref. Debit Credit Balance Balance May 1 30 30 9,751 CR6 CP11 7,150 16,901 6,593 10,308 Cash Payments (CP) Check No. Cash Credit Cash Receipts (CR) Date Cash Debit May 2 $ 2,728 8 512 10 1,693 16 832 22 427 29 982 30 2,577 Total $9,751 3113 3114 3115 3116 3117 3118 3119 3120 3121 3122 Total $ 1,522 1,759 1,930 63 805 87 476 1,049 257 2,360 $10,308 $ 7,150 $ 700 EFT 2,728 512 1,693 832 427 1,325 BC 8,217 Bank Statement for May 2018 Beginning balance Deposits and other additions: May 1 4 9 12 17 22 23 Checks and other deductions: May 7 13 14 15 18 21 26 30 30 Ending balance $ 1,522 1,390 492 US 1,759 63 316 EFT 805 87 10 SC (6,444) 8,923 $ Explanation: BC-bank collection of note receivable from customer, EFTclectronic funds transfer, Usunauthorized signature, SC-service chargeStep by Step Solution
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