Maple Industries Inc. deposits all cash receipts on the day when they are receiv
ID: 2598682 • Letter: M
Question
Maple Industries Inc. deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on December 31, its Cash account shows a debit balance of $18.399. The company's bank statement as of December 31 shows an ending cash balance of $15,951. The following information was also available. (a). Outstanding checks as of December 31 total $2,276. (b). Included with the bank statement was a debit memo in the amount of $50 for service charges. (c). Check No. 2519, listed with the canceled check, was correctly drawn for $820 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 $880. (d) The December 31 cash receipts of $3,470 were placed in the bank's night depository after banking hours and were not recorded on the December 31 bank statement. (e) The bank deducted $1,264 for an NSF check from a customer deposited on December 10. Required: Prepare the bank reconciliation as of December 31. Maple Industries Inc. Bank Reconciliation At December 31; Update to Bank Statement; Ending Cash Balance per Bank Statement. Additions: 0 0 Deductions: 0 Up-to-date ending cash balance; Updates to Company's Book, Ending Cash Balance per Books;Additions: $ 0 $0 Deductiona: $ 0 Up-to-date ending cash balance
Explanation / Answer
The bank statement will be prepared as follows:
M Industries Inc. Bank Reconciliation At December 31 Update to Bank Statement Ending cash balance per bank statement 15951 Add: Deposit in transit 3470 Total 19421 Deduct: Outstanding checks 2276 Up-to-date ending cash balance 17145 Updates to Company's Book Ending cash balance per books 18399 Add: Error in recording 60 18459 Deduct: Bank service charges 50 NSF check 1264 1314 Up-to-date ending cash balance 17145