The bank portion of the bank reconciliation for Carlin Company at November 30, 2012, is shown here and on the next page.
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The adjusted cash balance per bank agreed with the cash balance per books at November 30. The December bank statement showed the following checks and deposits.
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The cash records per books for December showed the following.
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The bank statement contained two memoranda.
1. A credit of $2,645 for the collection of a $2,500 note for Carlin Company plus interest of $160 and less a collection fee of $15. Carlin Company has not accrued any interest on the note.
2. A debit of $819.10 for an NSF check written by K. Webster, a customer. At December 31, the check had not been re deposited in the bank At December 31, the cash balance per books was $12,513.30, and the cash balance per bank statement was $18,988.40. The bank did not make any errors, but Carlin Company made two errors.
Instructions
(a) Using the four steps in the reconciliation procedure described on pages 354–355, prepare a bank reconciliation at December 31, 2012.
(b) Prepare the adjusting entries based on the reconciliation.