Question

Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indice On October 31, 2021, Damon Company's general ledger shows a checking account balance of $8.457. The company's cash receipts for the month total $74.720, of which $71,395 has been deposited in the bank. In addition, the company has written checks for $72,527, of which $71,342 has been processed by the bank. The bank statement reveals an ending balance of $13187 and includes the following items not yet recorded by Damon bank service fees of $350, note receivable collected by the bank of $7,000, and interest eared on the account balance plus from the note of $1,320. After closer inspection, Damon realizes that the bank incorrectly charged the company's account $1,100 for an automatic withdrawal that should have been charged to another customer's account. The bank agrees to the error Required: 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on October 31, 2021 (Amounts to be deducted should be indicated with a minus sign.) Bank's Cash Balance Per bank statement Bank error Deposits outstanding Checks outstanding Answer is complete and correct. DAMON COMPANY Bank Reconciliation October 31, 2021 Company's Cash Balance 13,187 Per general ledger 1.100 Interest earned 3.325 Note received (1 185) Service fees 8.457 1,320 7,000 (350) Bank balance per reconciliation $ 16,427 Company balance per reconciliation S 16,427 Pov1 of 1 Next Tarta

Answer 1

Solution 1:

Damon Company
Bank Reconciliation - October 31
Bank's Cash balance		Company's cash balance
Particulars	Amount	Particulars	Amount
Ending balance as per Bank Statements	$13,187.00	Ending Balance as per cash books	$8,457.00
Additions:		Additions:
Outstanding Deposits	$3,325.00	Note collection	$7,000.00
Bank Error	$1,100.00	Interest earned	$1,320.00
Deductions:		Deductions:
Outstanding Checks	-$1,185.00	Service fees	-$350.00
Up to date cash balance as per bank	$16,427.00	Up to date cash balance as per books	$16,427.00

Solution 2:

Journal Entries - Damon company
Date	Particulars	Debit	Credit
31-Oct	Cash Dr	$8,320.00
	To Note receivables		$7,000.00
	To Interest revenue		$1,320.00
	(To record increase in cash due to bank reconciliation)
31-Oct	Service fees expense Dr	$350.00
	To Cash		$350.00
	(Being service charge debited by bank)