shown is the information needed to prepare a bank reconciliation for Warren Electric at December 31.At December 31, cash per the bank statement was $15,200; cash per the company’s records was $17,500Two debit memoranda accompanied the bank statement: service charges for December of $25, $775 check drawn by Jane Jones marked NSFCash receipts of $10,000 on December 31 were not deposited in January 4.The following checks had been issued in December but were not included among the paid checks returned by the bank: no 620 for $1,000, no 641 for $4,500a.Prepare a bank reconciliation at December 31.b.Prepare the necessary journal entry or entries to updates the account records.c.Assume that company normally is not required to pay a bank service charge if it maintains a minimum average daily balance of $1,000 throughout the month. If the company’s average daily balance for December had been $8,000, why did it have to pay a $25 service charge?

Bank Reconciliation Statement: Bank statement is prepared by bank. The company maintains its own…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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shown is the information needed to prepare a bank reconciliation for Warren Electric at December 31.

At December 31, cash per the bank statement was $15,200; cash per the company’s records was $17,500
Two debit memoranda accompanied the bank statement: service charges for December of $25, $775 check drawn by Jane Jones marked NSF
Cash receipts of $10,000 on December 31 were not deposited in January 4.
The following checks had been issued in December but were not included among the paid checks returned by the bank: no 620 for $1,000, no 641 for $4,500

a.Prepare a bank reconciliation at December 31.

b.Prepare the necessary journal entry or entries to updates the account records.

c.Assume that company normally is not required to pay a bank service charge if it maintains a minimum average daily balance of $1,000 throughout the month. If the company’s average daily balance for December had been $8,000, why did it have to pay a $25 service charge?

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