The cash data of Eddy Automotive for October 2018 follow: Eddy Automotive received the following bank statement
Question:
The cash data of Eddy Automotive for October 2018 follow:
Eddy Automotive received the following bank statement on October 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 $1,380. (Eddy Automotive’s accountant mistakenly recorded the check as $1,830.)
d. The bank collected a note receivable for Eddy Automotive.
Requirements
1. Prepare Eddy Automotive’s bank reconciliation at October 31, 2018.
2. Prepare the journal entries required at October 31, 2018.
3. Describe how a bank account and the bank reconciliation help the general manager control Eddy Automotive’s cash.
Step by Step Answer:
Financial Accounting
ISBN: 978-0134725987
12th edition
Authors: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.