Answer:
1. Damon Company
Bank Reconciliation Statement
October 31, 2018
<u>Bank Balance</u>
Amount$
Bank cash balance as per statement 11,725
Add: Adjustment
Deposits outstanding 3,025
(74,320 - 71,295)
Bank error 300
Less: Adjustment
Check outstanding <u>1,485</u>
(72,467 - 70,983)
Bank balance as per Reconciliation <u>$13,567</u>
<u></u>
<u>Company's Cash balance</u>
Amount$
Company's Cash balance as per General Ledger 8,397
Add: Adjustment
Interest earned 320
Note collected 5,000
Less: Adjustment
Bank service fees <u>150</u>
Company's Cash balance as per Reconciliation <u>13,567</u>
Hence, correct ending balance of cash as on december 31, 2016 is $13,567
2. Necessary entries to adjust the balance for cash.
Date Account Title and Explanation Debit Credit
31 Oct Cash $5,320
Notes Receivables $500
Interest revenue $320
(To record cash increase)
Date Account Title and Explanation Debit Credit
31 Oct Service charges $150
Cash $150
(To record cash decreases)
