Question 2

You have received the bank statement for your company's account and need to reconcile it with your cash account. Your records show an ending balance for the month of $12,722.40 while the bank's records show an ending balance of $12,367.16. The bank charged $8 in service fees and paid $26.05 in interest. All but three cheques written during the month were processed by the bank without incident during the month. The three exceptions were: 1) Check #841 was correctly processed by the bank as $981.27 but was mistakenly recorded by you as $781.27. 2) Check #853 for $64.57 had not yet been processed by the bank. 3) Check #855 for $683.46 had not yet been processed by the bank. All but two of the deposits made during the month were processed by the bank without incident. The two exceptions were: 1) A customer cheque for $307.95, which had been deposited during the month, was returned NSF. 2) A deposit totalling $613.37 had not yet been processed by the bank. Required 1. Using the information provided above, prepare a bank reconciliation. 2. Prepare any journal entries required