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c. Sales tax payable of $14,400. IL. (20) The December cash record of ABB Insurance follow yments b Cash Receipts Check No. Cash Credit Date Cash Debit Dec 3 S 850 S 4,150 540 560 2,190 1,870 2416 2417 2418 2419 2420 2421 2422 160 670 1,690 1,450 1,200 640 16 s cash account shows a balance of $16,650 at December 31. On December 31, the compang received the following bank statement Bank Statement for December Beginning Balance $14,000 Deposits and other Credits Dec. EFT S 400 Dec. 2 Checks and other Debits NSF S 700 4,150 540 560 2,190 1,700 11 Check NO. 2416 19 22 Check NO. 2417 29 Check NO. 2418 31 Check NO. 2419 31 850 400 160 670 EFT 16 24 25 BC 1,960 SC 10 Ending Balance$18.590 Notes: BC--bank collection; EFT-electronic funds transfer, NSF-nonsufficient funds check Sc-service charge Additional data for the bank reconciliation follows: a. The EFT credit was a receipt of rent. The EFT debit was an insurance payment. b. The NSF check was received from a customer named Dunlap c. The S1,700 bank collection was for a note receivable. The correct amount of Check 2419 for rent expense is $1,940 instead of $1,490 on cash 1) Prepare the bank reconcilation for ABB Insurance as at December 31. 2) Journalize any required entries from the bank reconciliation. d.
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Answer #1

Bank Reconciliation is as prepared below:

ABB Insurance
Bank Reconciliation
Dec-31
Particulars Amount ($) Amount ($)
Unadjusted bank Balance 18,590.0
Add: Deposit in transit 1,870.0
1,870.0
Less: outstanding checks
2420 1,450
2421 1,200
2422 640 3,290
True cash balance 17,170.0
Unadjusted book Balance 16,650.0
Add: Funds collected through EFT 400.0
Bank Collections 1,700
2,100
Less:
Check No. 2419 entered with less amount (1,960-1,490) 470.0
Service Charges 10.0
NSF Checks 700.0
EFT 400.0 1,580.0
True cash balance 17,170.0
Date Particulars L.F Amount ($) Amount ($)
20XX
Dec-31 Cash 400
Rent Revenue 400
(To record electronic fund transfer received by bank)
Dec-31 Cash 1,700
Note Receivable 1700
(To note receivable collected)
Dec-31 Rent Expense 470.0
Cash 470
(To record error in recording check)
Dec-31 Bank Charges 10.0
Cash 10
(To record bank service charges)
Dec-31 Account Receivable-Dunlap Chemical 700
Cash 700
(For NSF check returned)
Dec-31 Insurance Expense 400
Cash 400
(for paid for insurance)
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