QUESTION ONE (20 MARKS) A. Why do businesses need to prepare a bank reconciliation statement and give six examples of the common activities that necessitate a bank reconciliation statement? B. On December 1, 2014, Fullerton Company had the following account balances. Debit Credit Cash 18,200 Notes Receivable 2.200 Accounts Receivable 7, 500 Inventory 16,000 Prepaid Insurance 1,600 Equipment 28,000 Accumulated Depreciation - Equip 3,000 6, 100 Accounts Payables Owners Capital 64, 400 During December, the company completed the following transactions December Received K3,600 cash from customers in payment of account (no discount allowed) Purchased merchandise on account from Vance Co. K12,000, terms 1/10, n/30 Sold merchandise on account K16,000, terms 2/10, n/30. The cost of the merchandise sold was K10,000. 19 Paid salaries K2,200