You are a student intern at Stover Ltd. The bookkeeper has gathered all of the information necessary to complete Stovers bank reconciliation for October. She has asked you to complete it for her. Stover's general ledger showed a cash balance of $18,080 at October 31. The company's bank statement for the month of October showed that the company had a cash balance of $20,825 as at October 31. A comparison of the bank statement and the accounting records revealed the following information:

1. Bank service charges for the month were $65. This is automatically withdrawn from the bank account every month.

2. The cash receipts for October 31 amounted to $3,620 and had been deposited in the night drop slot at the bank on the evening of October 31. These were not reflected on the bank statement for October.

3. During the last week of the month, one of Stover's customers made an electronic payment directly to Stover's bank in the amount of $2,750. Because the customer had not notified Stover of the payment, the company was unaware of it until it received the bank statement for October.

4. Stover had written and mailed out cheques with a value of $6,250 that had not yet cleared the bank account.

5. A cheque for $2,660 from one of Stover's customers had been deposited during the last week of October. However, the cheque subsequently bounced so Stovers bank withdrew the amount from Stovers account, noting on the bank statement that the cheque was NSF.

6. Cheque #1926, which was a payment for legal fees, had been correctly written and withdrawn from Stovers bank account for $3,670 but had been incorrectly recorded in the general ledger as $3,760.

Instructions

(a) Prepare the bank reconciliation as at October 31.

(b) Prepare any journal entries required from the reconciliation.

(c) Identify two business processes or controls that Stover could implement to help minimize the number of reconciling items on their bank reconciliation. Try to tie your response to one of the 6 items identified above.