Max Co’s cash account was last reconciled on November 30, 2021. The unadjusted cash balance at December 31, 2021 was $123,251. The following information was provided for reconciling the bank balance for December 31, 2021.
‐ Interest on the bank loan of $4,000 was charged on the bank statement
‐ The bank service charge for the month of $88 is included on the bank statement
‐ Outstanding cheques at December 31, 2021 were $66,500
‐ The December 30 and December 31st deposits of $45,390 and $34,280 were recorded on January 4, 2022.
‐ An NSF cheque for $1,860 was returned with the December bank statement. This cheque will be redeposited in January. The company has not yet made an entry for this.
‐ One of the cheques that cleared was recorded for $3,535. The bank statement shows $3,355 which was the correct amount. The cheque was for a payment of general office expenses.
‐ The bank statement balance at December 31, 2021 was $106,173
a) Record any adjusting journal entries inMax Co’s accounting records.
b) What is the revised cash balance in the books of Max Co?
c) Prepare a reconciliation of the bank balance to the book balance for December 31, 2021.