1. Prepare a bank reconciliation as of December 31.

2. Journalize the necessary entries. The accounts have not been closed.

3. If a balance sheet is prepared for The Diplomat Co. on December 31, what amount should be reported as cash?

The cash account for The Diplomat Co. on December 1 indicated a balance of $91,145. During December, the total cash deposited was $293,151, and checks written totaled $307,360. The bank statement indicated a balance of $112,675 on December 31 . Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: a). Checks outstanding totaled $42,840. b). A deposit of $12,200, representing receipts of December 31 , had been made too late to appear on the bank statement. c). A check for $7,250 had been incorrectly charged by the bank as $2,750. d). A check for $760 returned with the statement had been recorded by The Diplomat Co. as $7,600. The check was for the payment of an obligation to Mendez Co. on account. e). The bank had collected for The Diplomat Co. $7,385 on a note left for collection. The face of the note was $7,000. f). Bank service charges for December amounted to $125. g). A check for $2,500 from Horizon Academy was returned by the bank because of insufficient funds. The cash account for The Diplomat Co. on December 1 indicated a balance of $91,145. During December, the total cash deposited was $293,151, and checks written totaled $307,360. The bank statement indicated a balance of $112,675 on December 31 . Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: a). Checks outstanding totaled $42,840. b). A deposit of $12,200, representing receipts of December 31 , had been made too late to appear on the bank statement. c). A check for $7,250 had been incorrectly charged by the bank as $2,750. d). A check for $760 returned with the statement had been recorded by The Diplomat Co. as $7,600. The check was for the payment of an obligation to Mendez Co. on account. e). The bank had collected for The Diplomat Co. $7,385 on a note left for collection. The face of the note was $7,000. f). Bank service charges for December amounted to $125. g). A check for $2,500 from Horizon Academy was returned by the bank because of insufficient funds