The bank portion of the bank reconciliation for Blue Diamond Company at November 30, 2007, is shown here.

BLUE DIAMOND COMPANY Bank Reconciliation November 30, 2007 Cash balance per bank $14,367.90 Add: Deposits in transit 2,530.20 16,898.10 Less: Outstanding checks Check Number Check Amount 3451 $2,260.40 3470 1,100.10 3471 844.50 3472 1,426.80 3474 1,050.00 6,681.80 Adjusted cash balance per bank $10,216.30 The adjusted cash balance per bank agreed with the cash balance per books at November 30.

The December bank statement showed the following checks and deposits.

Bank Statement Checks Deposits Date Number Amount Date Amount 12-1 3451 $ 2,260.40 12-1 $ 2,530.20 12-2 3470 1,100.10 12-4 1,211.60 12-7 3472 1,426.80 12-8 2,365.10 12-4 3475 1,640.70 12-16 2,672.70 12-8 3476 1,300.00 12-21 2,945.00 12-10 3477 2,130.00 12-26 2,567.30 12-15 3479 3,080.00 12-29 2,836.00 12-27 3480 600.00 12-30 1,025.00 12-30 3482 475.50 12-29 3483 1,140.00 eae 12-31 3485 540.80 Total $15,694.30

$18,152.90 Problems: Set B 36]

The cash records per books for December showed the following.

Cash Receipts Cash Payments Journal Journal Date Number Amount Date Number Amount 12-1 3475 $1,640.70 12-20 3482 $ 475.50 12-2 3476 1,300.00 12-22 3483 1,140.00 12-2 3477 2,130.00 12-23 3484 764.00 12-4 3478 538.20 12-24 3485 450.80 12-8 3479 3,080.00 12-30 3486 1,389.50 12-10 3480 600.00 = Total $14,316.10 12-17 3481 807.40 al Date Amount 12-3 $ 1,211.60 12-7 2,365.10 12-15 2,672.70 12-20 2,954.00 12-25 2.900530)

12-28 2,836.00 12-30 1,025.00 12-31 1,190.40 Total $16,822.10 The bank statement contained two memoranda. 1. A credit of $3,145 for the collection of a $3,000 note for Blue Diamond Company plus interest of $160 and less a collection fee of $15. Blue Diamond Company has not accrued any interest on the note. 2. A debit of $943.10 for an NSF check written by J. Waller, a customer. At December 31 the check had not been redeposited in the bank.

At December 31 the cash balance per books was $12,722.30, and the cash balance per bank statement was $19,028.40Th.e bank did not make any errors, but two errors were made by Blue Diamond Company.

Instructions

(a) Using the four steps in the reconciliation procedure described on page 330, prepare

(a) Cash bal. $14,825.20 a bank reconciliation at December 31, 2007.

(b) Prepare the adjusting entries based on the reconciliation. [Note: The correction of any errors pertaining to recording checks should be made to Accounts Payable. The correction of any errors relating to recording cash receipts should be made to Accounts Receivable. |