The following is information for Dundee Realty:
a. Balance per the bank statement dated October 31, 2014, is $26,830.
b. Balance of the Cash account on the company books as of October 31, 2014, is $5,575.
c. $14,680 of customer deposits were outstanding as of September 30; this amount had been deposited to Dundee's account in October.
d. Cheques written in October that had not cleared the bank as of October 31 were:
#8700................................ $985
#8709 ........................... $12,600
#8801............................... $620
#8815............................... $145
e. The bank charged Dundee's account for a $2,350 cheque of the E-Zone Networks; the cheque was found among the cancelled cheques returned with the bank statement.
f. Bank service charges for October amount to $65.
g. A customer's cheque (Teresa Krant) for $7,050 had been deposited in the bank correctly but was recorded in the accounting records as $7,500.
h. Among the cancelled cheques is one for $260 given in payment of an account payable to Decker Company; the bookkeeper had recorded the cheque incorrectly at $620 in the company records.
i. The bank had collected a $22,000 note plus interest of $880. A fee of $50 was charged for this service.
j. A bank deposit of October 31 for $13,420 does not appear on the bank statement.
Required
1. Prepare a bank reconciliation statement as of October 31, 2014.
2. Prepare the necessary entries to make the Cash account agree with the bank reconciliation adjusted Cash balance as of October 31.
Analysis Component: Identify the effects on the income statement and balance sheet if the entries in Part 2 were not recorded.