The cash data of Duffy Automotive for July 2016 follow:

Duffy Automotive received the following bank statement on July 31, 2016:

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. (Duffy Automotive's accountant mistakenly recorded the check as $1,830.)
d. The bank collected a note receivable for Duffy Automotive.
Requirements
1. Prepare the Duffy Automotive bank reconciliation at July 31, 2016.
2. Prepare the journal entries required at July 31, 2016.
3. Describe how a bank account and the bank reconciliation help the general manager control Duffy Automotive's cash.

Transcribed Image Text:

Cash Account No. 101 Date Item Jrnl. Ref. Debit Credit July 1 31 31 Balance 7,450 17,143 CR 6 CP 11 9,693 0 9,885 Cash Receipts (CR) Cash Payments (CP) Cash Debit Cash Credit July 2 2,850 1,532 $9,693 2,301 $9,885 2 A1 Bank Statement for July 2016 Beginning balance Deposits and other additions .450 800 EFT 850 560 693 890 409 ul 12 17 23 8,477 11 Checks and other deductions: 1,532 1,380 13 13 430 US 15 16 15 18 21 26 30 30 1,615 70 351 EFT 18 19 20 21 790 97 10 (6275 9,652 ding balance