Question

Based on the following information, prepare the bank reconciliation for Cougar Corp. as of December 31. A. On December 31, Cougar Corp. general ledger showed a cash balance of $26,504. The company's bank statement showed an ending balance of $24,575. B. A deposit on December 31 for $2,500 was not recorded by the bank until January 1. C. A check for $550 received from one of Cougar's customers was noted as NSF by the bank. D. A review of the company's deposits shows that a deposit entered in the company's general ledger for $5400 was actually a deposit for $4500. E. The company's checking account shows interest of $21. F. Cougar's bank statement shows an EFT received from a customer for $1,700. G. The following information related to outstanding checks was prepared.

Answer 1

Answer and Explanation:

The Preparation of bank reconciliation for Cougar Corp. as of December 31 is shown below:-

Cougar Corp.

Bank reconciliation

For the year ended December 31

Particulars Amount

Bank balance Dec 31 $24,575

Add: Deposit in transit $2,500

Less:

Outstanding checks #302 ($180)

Outstanding checks #303 ($95)

Outstanding checks #304 ($25) ($300)

Bank balance adjusted $26,775

Cash balance on 31 Dec $26,504

Add: EFT from customer $1,700

Add: Interest income $21 $1,721

Less: Posting error

($5,400 - $4,500) $900

Less: NSF check $500 $1,400

Book balance adjusted $26,775

Hence, the bank balance and the book balance are matched