Calculate the correct ending balance of cash

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Reference no: EM131211254

On October 31, 2018, Damon Company’s general ledger shows a checking account balance of $8,412. The company’s cash receipts for the month total $74,420, of which $71,320 has been deposited in the bank. In addition, the company has written checks for $72,482, of which $71,072 has been processed by the bank. The bank statement reveals an ending balance of $12,092 and includes the following items not yet recorded by Damon: bank service fees of $200, note receivable collected by bank of $5,500, and interest earned on the account balance plus from the note of $570. After closer inspection, Damon realizes that the bank incorrectly charged the company’s account $500 for an automatic withdrawal that should have been charged to another customer’s account. The bank agrees to the error. Required: 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on October 31, 2018.

Required:

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 that increases and decreases for cash.

Reference no: EM131211254

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