On October 31, 2018, Damon Company\'s general ledger shows a checking account ba

Question

On October 31, 2018, Damon Company's general ledger shows a checking account balance of $8,457. The company's cash receipts for the month total $74,720, of which $71,395 has been deposited in the bank. In addition, the company has written checks for $72,527, of which $71,342 has been processed by the bank. The bank statement reveals an ending balance of $13,187 and includes the following items not yet recorded by Damon: bank service fees of $350, note receivable collected by bank of $7,000, and interest earned on the account balance plus from the note of $1,320. After closer inspection, Damon realizes that the bank incorrectly charged the company's account $1,100 for an automatic withdrawal that should have been charged to another customers account. The bank agrees to the error. Required: 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on October 31, 2018. (Amounts to be deducted should be indicated with a minus sign.) DAMON COMPANY Bank Reconciliation October 31, 2018 Bank's Cash Balance Company's Cash Balance Per bank statement Per general ledger Bank balance per reconciliation Company balance per reconciliation

Explanation / Answer

Bank reconciliation October 31,2018 Bank's cash balance Company's cash balance Per bank statement 13187 Per general ledger 8457 Deposits outstanding 3325 Service fees -350 Checks outstanding -1185 Note received 7000 Bank error 1100 Interest earned 1320 Bank balance per reconciliation 16427 Company balance per reconciliation 16427

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