Calculate the correct ending balance of cash on october

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Problem

On October 31, 2018, Damon Company's general ledger shows a checking account balance of $8,409. The company's cash receipts for the month total $74,400, of which $71,315 has been deposited in the bank. In addition, the company has written checks for $72,479, of which $71,054 has been processed by the bank.

The bank statement reveals an ending balance of $12,019 and includes the following items not yet recorded by Damon: bank service fees of $190, note receivable collected by bank of $5,400, and interest earned on the account balance plus from the note of $520. After closer inspection, Damon realizes that the bank incorrectly charged the company's account $460 for an automatic withdrawal that should have been charged to another customer's account. The bank agrees to the error.

1. Prepare a bank reconciliation to calculate the correct ending balance of cash on October 31, 2018.

2. Record the necessary entries to adjust the balance for cash.

Reference no: EM131931788

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