preparing a bank reconciliation
Jim Guidry owns a construction business, Guidry Supply Co. The following cash information is available for the month of October 2011.
As of October 31, the bank statement shows a balance of $12,300. The October 31 unadjusted balance in the Cash account of Guidry Supply Co, is $11,200. A review of the bank statement revealed the following information:
1.A deposit of $1,500 on October 31, 2011, does not appear on the October 31 bank statement.
2.A debit memo for $50 was included in the bank statement for the purchase of a new supply of checks.
3.When checks written during the month were compared with those paid by the bank, three checks amounting to $4,450 were found to be outstanding.
4.It was discovered that a check to pay for repairs was correctly written and paid by the bank for $3,100 but was recorded on the books as $1,300.
Required
a.Prepare a bank reconciliation at the end of October showing the true cash balance.
b.Prepare any necessary journal entries to adjust the books to the true cash balance.
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