Reference no: EM132870360
Question - Rancor company provided the following information for the month of December:
Balance per bank statement 4,000,000
Balance per cash book 2,700,000
Outstanding checks 600,000
Deposit in Transit 475,000
Service charge 10,000
Proceeds of bank loan, December 1 discounted for 6 months at 12%, not recorded o company books 940,000
Customer's check charged back by bank for absence of counter signature 50,000
Deposit of 100,000 incorrectly recorded 10,000 by banks as Check of Rancid company charged by bank against Rancor Company account 150,000
Customer's note collected by bank in favor of Rancor company.
Face 400,000
Interest 40,000
Total 440,000
Collection fee 5,000 435,000
Erroneous debit memo of December 28, to charge company's account with settlement of bank loan 200,000
Deposit of Rancid company credited to Rancor account 300,000
Required -
a. Prepare bank reconciliation using the adjusted balance approach.
b. Prepare an adjusting entries on December 31.