The following information was available to reconcile Frogbox Moving’s book Cash balance with its bank statement balance as of December 31, 2020:

a. The December 31 Cash balance according to the accounting records was $16,562, and the bank statement balance for that date was $36,780.

b. Cheque #3115 for $1,119 and cheque #3201 for $2,507, both written and entered in the accounting records in December, were not among the cancelled cheques returned. Two cheques, #3207 for $15,985 and #3221 for $1,672, were outstanding on November 30 when the bank and book statement balances were last reconciled. Cheque #3207 was returned with the December cancelled cheques, but cheque #3221 was not.

c. When the December cheques were compared with entries in the accounting records, it was found that cheque #3199 had been correctly written for $4,080 to pay for office supplies, but was erroneously entered in the accounting records as though it were written for $4,800.

d. Two debit memos were included with the returned cheques and were unrecorded at the time of the reconciliation. One of the debit memos was for $4,064 and dealt with an NSF cheque for $4,000 that had been received from a customer, Tork Industries, in payment of its account. It also assessed a $64 fee for processing. The second debit memo covered cheque printing and was for $93. These transactions had not been recorded by Frogbox before receiving the statement.

e. A credit memo indicated the receipt of an electronic fund transfer of $22,800 for a customer payment. A $150 bank service charge was deducted. This transaction was not recorded by Frogbox before receiving the statement.

f. The December 31 cash receipts of $4,293 had been placed in the bank’s night depository after banking hours on that date and did not appear on the bank statement.

Required

1. Prepare a bank reconciliation for the company as of December 31.

2. Prepare the general journal entries necessary to bring the company’s book balance of Cash into conformity with the reconciled balance.

Analysis Component: Explain the nature of the messages conveyed by a bank to one of its depositors when the bank sends a debit memo and a credit memo to the depositor.