AC1220 ACCOUNTING I Lab 4 . 1 1 AC1220 Accounting I Lab 4.1 Based on the provided scenario for Jake’s Computer Sale and Repair, answer the following: 1. Bank Reconciliation Prepare the bank reconciliation for Jake’s Computer Sale and Repair as of May 31, 20x1, based on the information provided in the question. 2. Journal Entries Make the necessary journal entries to reconcile the cash account with the bank statement for the transactions described. Ensu re to account for the corrected prepaid advertising, NSF check, interest earned, and bank service charges. 3. Internal Control Issues Jake is considering expanding Dave's responsibilities to include journalizing all sales and inventory - related transactions. Identify the internal control issues that could arise from this decision. Provide at least one example of a potential problem and suggest a solutio n to mitigate that issue. Word Count Requirement: 750 - 1,000 words. AC1220 ACCOUNTING I Lab 4 . 1 2 AC1220 Lab 4.1 Introduction On May 3 1 , 20x1, Jake obtains a bank statement from Ninth - Bank. According to the bank statement, the business bank account of Jake’s Computer Sale and Repair has an ending balance of $ 33 , 89 5 on May 31, 20x1. The cash account in the books of Jake’s Computer Sale and Repair shows an ending balance of $44,640. Jake notes the following items: • Jake deposited $11 ,600 in Ninth - Bank on May 30. The bank has not yet credited this amount to the business bank account. • The fo llowing checks written by Jake have not yet been presented to Ninth - Bank for payment : o Check # 125: $350 o Check # 131: $1,100 o Check # 138: $90 • Jake’s Computer Sale and Repair presently has $800 in prepaid advertising on its books. The advertising agency had overcharged Jake’s Computer Sale and Repair by $ 150. The advertising agency corrects the error and deposits the amount directly into the business bank account. • Bank service charges per the bank statement are $35 . • Interest earned on the bank balance is $10 . • A check for $250, previously recorded a s a payment by a customer on an account receivable , wa s returned marked “ non sufficient funds ” (NSF). • The bank incorrectly debited the bank account of Jake’s Computer Sale and Repair for $560. This amount in fact relates to a check drawn on the account of a different business, Ja ck ’s Car Sales and Repairs .