Problem 3

December 31, after all posting was completed, the cash account of Reynolds Company had a $9,675 debit balance but its December 31 bank statement showed only $9,000 on deposit in the bank that day. The following information was available to reconcile the two accounts: A. check 409, dated December 15, for $1125, was not among the canceled checks. B. check 437, for store supplies was correctly drawn as $619 and paid by the bank but it was erroneously entered in the journal as though it were $491. C. the December 311 cash receipts, $1,392, were place in the bank's night depository after banking hours on that date and did not appear on the bank statement. D. Included with the December canceled checks returned was $25 debit memo for bank services. E. Also included with the canceled checks was a memo with a $455 NSF check attached. The check had been received from a customer in payment of his account receivables and was returned by his bank as uncollectible. Required:

1. Prepare December 31 bank reconciliation for Reynolds Company

2. Prepare general journal entries to adjust the cash account