Case Info: You are auditing the general cash account for the Simply Soups Inc. for the fiscal year ended December 31, 2017. The client has not prepared the December 31, 2017 bank reconciliation. After a brief discussion with the Controller, you agree to prepare the reconciliation, with assistance from one of Simply Soup's accounting clerks. You obtain the following information:

From General Ledger

(Per Books)

From Bank Statement

(Per Bank)

Beginning balance of cash 12/1/2017

$506,074.33

$508,052.33

Deposits clearing the bank per the December bank statement

25,474.00

Checks clearing the bank per the December bank statement

25,307.00

December cash receipts (per the Cash Receipts Journal)

26,874.00

December cash disbursements (per the Cash Disbursements Journal)

54,026.79

Ending balance of cash 12/31/2017

$478,921.54

$508,219.33

Additional information obtained is as follows:

1.A check for $1,130 cleared the bank in December (per bank statement) but had not been recorded in the cash disbursements journal (per books) and therefore was not reflected in the December 31, 2017 balance of cash in the general ledger. This check was for an acquisition of inventory. Simply Soups uses the periodic-inventory method.

2.A check for $646 was charged to Simply Soup's account by the bank on December 10 (per bank statement) but this check had been written on a different company's bank account and therefore is not a check issued by Simply Soups.

3.Deposits clearing the bank in December (per bank statement) included $600 from November's deposits in transit.

4.Checks clearing the bank in December (per bank statement) included $2,578 from November's outstanding checks.

5.The bank charged Simply Soup's account for a nonsufficient check totaling $516 on December 25 (per bank statement). The credit manager concluded that the customer intentionally closed its account.

6.A note payable for $6,000, plus interest of $400, was automatically paid from the bank account on December 1 (per bank statement), under an agreement signed 4 months before December.The note payable was recorded on Simply Soup's books at the inception of the agreement.

7.The bank statement reflected bank service charges of $107 for December.

Requirements:

1.Prepare a bank reconciliation that shows both the unadjusted and adjusted balance per books.

2.Prepare the adjusting journal entry to adjust cash for the items identified in the bank reconciliation.