The cash data of Donald Automotive for January 2010 follow:

Donald received the following bank statement on January 31, 2010:

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 expense.
b. The unauthorized signature check was received from a customer.
c. The correct amount of check number 3115, a payment on account, is $1,350.
(Donald’s accountant mistakenly recorded the check for $1,530.)

Requirements
1. Prepare the Donald Automotive bank reconciliation at January 31, 2010.
2. Describe how a bank account and the bank reconciliation help the general manager control Donald’scash.

Transcribed Image Text:

Cash Account No. 101 Date Jrnl. Ref. Debit Credit Balance Balance 31 31 CR 6 CP 11 9,127 16,327 9,983 Cash Receipts (CR) Date Cash Payments (CP) Cash Credit $1,475 Total -2,322 $9,983 Bank Statement for January 2010 $ 7,200 Beginning balance Deposits and other additions: an 1 S 650 EFT 2,726 572 1,647 837 436 12 231,350 BC 8,218 Checks and other deductions: Jan7$1,475 13. 1,350 466 US 1,925 32 15 331 EFT 870 30 132 20 SC (6,601) $ 8,817 Ending balance