The cash data of Richmond Automotive for June 2014 follow:

Richmond Automotive received the following bank statement on June 30, 2014:

Additional data for the bank reconciliation include the following:
a. The EFT deposit was a receipt of monthly rent. Te 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 $1,380. (Richmond Automotive’s accountant mistakenly recorded the check as $1,830.)

Requirements
1. Prepare the Richmond Automotive bank reconciliation at June 30, 2014.
2. Prepare the journal entries required at June 30, 2014.
3. Describe how a bank account and the bank reconciliation help the general manager control Richmond Automotive’scash.

Transcribed Image Text:

Account No. 101 Date Jrnl. Ref. Debit Credit Balancc June 1 Balance CR6 CP11 10,167 17,467 10,169 Cash Receipts (CR) Cash Payments (CP) Cash Debit Cash Credit S 2,971 9 Total S10,167 A1 Bank Statement for June 2014 Beginning balance Deposits and other additions 7,300 June 1 525 EFT 2,971 507 1,661 827 415 12 17 23 8,281 Checks and other deductions 1,524 1380 June 13 14 15 18 21 26 30 30 455 US 1,601 43 467 EFT 839 120 19 10 SC 21 Ending balance 9,142 Explanation: BC bank collection of note receivable from customer, EFT-electronic funds transter, US -unanthorixed signature, SC service charge