Answer and Explanation:
The Preparation of bank reconciliation for Cougar Corp. as of December 31 is shown below:-
                                          <u>Cougar Corp.</u>
                                     <u>Bank reconciliation</u>
                           <u>For the year ended December 31</u>
<u>Particulars                                                Amount</u>
Bank balance Dec 31                            $24,575
Add: Deposit in transit                            $2,500
Less: 
Outstanding checks #302          ($180)
Outstanding checks #303          ($95)
Outstanding checks #304          ($25)     ($300)
Bank balance adjusted                             $26,775
Cash balance on 31 Dec                             $26,504
Add: EFT from customer             $1,700
Add: Interest income                   $21            $1,721
Less: Posting error
($5,400 - $4,500)                         $900
Less: NSF check                            $500     $1,400
Book balance adjusted                               $26,775
Hence, the bank balance and the book balance are matched