The bank statement for the checking account of Management Systems Inc. (MSI) showed a December 31, 2021, balance of $14,732.37. Information that might be useful in preparing a bank reconciliation is as follows:

1. Outstanding checks were $1,330.40.
2. The December 31, 2021, cash receipts of $580 were not deposited in the bank until January 2, 2022.
3. One check written in payment of rent for $247 was correctly recorded by the bank but was recorded by MSI as a $274 disbursement.
4. In accordance with prior authorization, the bank withdrew $460 directly from the checking account as payment on a note payable. The interest portion of that payment was $355. MSI has made no entry to record the automatic payment.
5. Bank service charges of $15 were listed on the bank statement.
6. A deposit of $880 was recorded by the bank on December 13, but it did not belong to MSI. The deposit should have been made to the checking account of MIS, Inc.
7. The bank statement included a charge of $80 for an NSF check. The check was returned with the bank statement and the company will seek payment from the customer.
8. MSI maintains a $210 petty cash fund that was appropriately reimbursed at the end of December.
9. According to instructions from MSI on December 30, the bank withdrew $10,500 from the account and purchased U.S. Treasury bills for MSI. MSI recorded the transaction in its books on December 31 when it received notice from the bank. Half of the Treasury bills mature in two months and the other half in six months.

Required: 1. Prepare a bank reconciliation for the MSI checking account at December 31, 2021. You will have to compute the balance per books. 2. Prepare any necessary adjusting journal entries indicated. 3. What amount would MSI report as cash and cash equivalents in the current asset section of the December 31, 2021, balance sheet?

REQUIREMENT 1:

Prepare a bank reconciliation for the MSI checking account at December 31, 2021. You will have to compute the balance per books. (Round your answers to 2 decimal places.)

Bank Reconciliation
Balance per bank statement	$14,732.37
Add:
Deposits outstanding	580.00
Automatic mortgage note payment	460.00
Deduct:
Checks outstanding	(1,330.40)
Error in recording rent check	(247.00)
Corrected cash balance
Balance per books
Add:
Automatic mortgage note payment	460.00
Service charges
Deduct:
Bank error
Corrected cash balance

REQUIREMENT 2:

PART 1:

• Record transaction to correct error in recording cash disbursement for rent.

Note: Enter debits before credits.

Event	General Journal	Debit	Credit
1	Cash	27
	Rent expense		27

PART 2:

• Record credits to cash revealed by the bank reconciliation. Use the miscellaneous expense account to record the bank service charges.

Note: Enter debits before credits.

Event	General Journal	Debit	Credit
2	Interest expense
	Notes payable
	Miscellaneous expense
	Accounts receivable
	Cash

REQUIREMENT 3:

What amount would MSI report as cash and cash equivalents in the current asset section of the December 31, 2021, balance sheet? (Round your answer to 2 decimal places.)

Total cash and cash equivalents