Question: The cash account of Abstract, Inc., disclosed
The cash account of Abstract, Inc., disclosed a balance of $16,348.82 on October 31. The bank statement as of October 31 showed a balance of $19,711.75. Upon comparing the statement with the cash records, the following facts were developed. (a) Abstract’s account was charged on October 26 for a customer’s uncollectible check amounting to $1,927. (b) A 2-month, 8%, $1,350 customer’s note dated August 25, discounted on October 12, was dishonored October 26 and the bank charged Abstract $1,374.91, which included a protest fee of $6.91. (c) A customer’s check for $580 was entered as $530 by both the depositor and the bank but was later corrected by the bank. (d) Check No. 661 for $1,838.00 was entered in the cash disbursements journal at $1,383.00 and Check No. 652 for $47.50 was entered as $475.00. The company uses the voucher system. (e) Bank service charges of $54.81 for October were not yet recorded on the books. (f) A bank memo stated that C. Castro’s note for $1,800 and interest of $74.20 had been collected on October 29, and the bank charged $15.00. (No entry was made on the books when the note was sent to the bank for collection.) (g) Receipts of October 29 for $5,450 were deposited November 1. The following checks were outstanding on October 31: 
Instructions: 1. Prepare a bank reconciliation as of October 31. 2. Give the journal entries required as a result of the preceding information.
Transcribed Image Text:
No. 620 $1,075.00 No. 671. $ 567.55 No. 621 2,199.98 No. 673 337.99 No. 632 2,765.25 No. 675 375.80 No. 670 1,776.89 No. 676 1,189.49
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