Reference no: EM132772520

Cash per the unadjusted trial balance is $12,255.

Cash balance per the bank statement is $11,650.

You are the staff accountant for Elm City Gifts. The owner has just received the December 31, 2020 bank statement and has asked you to prepare the monthly bank reconciliation. The following information is true for the given statement:

Check #115 has not cleared the bank. It was written for $525.

1. A deposit of $1,250 cleared the bank, but it was not recorded in the general ledger.
2. A check for $400 was found in the owner's desk drawer.
3. A deposit of $750 was taken to the bank after 2 p.m. on December 31, 2020, and it was not posted by the bank until January 1, 2021.
4. Errors were noted in the following checks:

Check #121 was recorded for $325 but cleared the bank as $315.
Check #125 was recorded for $585 but cleared the bank as $590.

Based on the information provided, prepare the monthly bank reconciliation for December. Use the following steps:

Question 1: Determine the adjusted bank balance.

1. Start with the ending bank balance.
2. Add amounts that increase the bank statement balance.
3. Deduct amounts that decrease the bank statement balance.