Cottage Co. deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close o

Question

3 years ago

11

Cottage Co. deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close o

f business on December 31, its Cash account shows a debit balance of $18,367. The company’s bank statement as of December 31 shows an ending cash balance of $15,941. The following information was also available: Outstanding checks as of December 31 total $2,271. Included with the bank statement was a debit memo in the amount of $45 for service charges. Check No. 2519, listed with the canceled checks, was correctly drawn for $815 in payment of a utility bill on December 16. The company mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $870. The December 31 cash receipts of $3,455 were placed in the bank’s night depository after banking hours and were not recorded on the December 31 bank statement. The bank deducted $1,252 for an NSF check from a customer deposited on December 10. Table is attached need help!

Business

1 answer:

Fiesta28 [93] · Answer 1 · 2022-03-16T12:36:41+03:00

Answer and Explanation:

The preparation of the bank reconciliation statement is presented below:

Cottage Co.

Bank reconciliation statements

At December 31

Updates to Bank Statement Updates to Company books

Ending bank balance as per Ending bank balance as per Books

Bank statement $15,941 $18,367

Additions Additions

Deposit in transit $3,455 Mistake $55 ($870-$815)

Deductions Deductions

Outstanding checks -$2,271 Service charges - $45

NSF check -$1,252

Up to date ending balance Up to date ending balance

$17,125 $17125