Tiny Corp. prepares monthly bank reconciliations of its checking account balance. The bank statement indicated the following:
Balance, beginning of the month ................. $15,640
Service charge for October .................. 65
Interest earned during October ....................... 80
NSF check from Green Corp. (deposited by Tiny) for goods
purchased on account..................... 615
Note ($2,500) and interest ($75) collected for Tiny from a customer ...2,575
An analysis of canceled checks and deposits and the records of Tiny revealed the following items:
Checking account balance per Tiny’s books) ............... $12,951
Outstanding checks as of October 31 ................... 1,410
Deposit in transit at October 31 ..................... 750
Error in recording a check issued by Tiny. (Correct amount of the check is
$606, but was recorded as a cash disbursement of $660. The check
was issued to pay for merchandise originally purchased on account)..... 54
Required:
1. Prepare a bank reconciliation at October 31, 2011, in proper form.
2. Record any necessary adjusting journal entries.
3. What is the amount of cash that should be reported on the October 31, 2011, balance sheet?