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P8-4A The bank portion of the bank reconciliation for Backhaus Company at November 30, 2010, was as follows.

BACKHAUS COMPANY

Bank Reconciliation

November 30, 2011

Cash balance per bank $14,367.90

Add: Deposits in transit 2,530.20

16,898.10

Less: Outstanding checks

Check Number Check Amount

3451 $2,260.40

3470 720.10

3471 844.50

3472 1,426.80

3474 1,050.00 6,301.80

Adjusted cash balance per bank $10,596.30

The adjusted cash balance per bank agreed with the cash balance per books at November 30.

The December bank statement showed the following checks and deposits.

Bank Statement
Checks				Deposits
Date	Number	Amount		Date	Amount
12-1	3451	$2,260.40		12-1	$2,530.20
12-2	3471	844.50		12-4	1,211.60
12-7	3472	1,426.80		12-8	2,365.10
12-4	3475	1,640.70		12-16	2,672.70
12-8	3476	1,300.00		12-21	2,945.00
12-10	3477	2,130.00		12-26	2,567.30
12-15	3479	3,080.00		12-29	2,836.00
12-27	3480	600.00		12-30	1,025.00
12-30	3482	475.50		Total	$18,152.90
12-29	3483	1,140.00
12-31	3485	540.80
	Total	$15,438.70

The cash records per books for December showed the following.

Cash Payments Journal							Cash Receipts Journal
Date	Number	Amount	Date	Number	Amount		Date	Amount
12-1	3475	$1,640.70	12-20	3482	$475.50		12-3	$1,211.60
12-2	3476	1,300.00	12-22	3483	1,140.00		12-7	2,365.10
12-2	3477	2,130. 00	12-23	3484	798.00		12-15	2,672.70
12-4	3478	621.30	12-24	3485	450.80		12-20	2,954.00
12-8	3479	3080.00	12-30	3486	1,889.50		12-25	2,567.30
12-10	3480	600.00	Total		$14,933.20		12-28	2,836.00
12-17	3481	807.40					12-30	1,025.00
							12-31	1,690.40
							Total	$17,322.10

The bank statement contained two memoranda:

A credit of $4,145 for the collection of a $4,000 note for Backhaus Company plus interest of $160 and less a collection fee of $15. Backhaus Company has not accrued any interest on the note.

A debit of $572.80 for an NSF check written by D. Chagnon, a customer. At December 31, the check had not been redeposited in the bank.

At December 31, the cash balance per books was $12,985.20, and the cash balanced per the bank statement was $20,654.30. The bank did not make errors, but two errors were made by Backhaus Company.

Instructions

Prepare a bank reconciliation at December 31.

Prepare the adjusting entries based on the reconciliation. (Hint: The correction of any errors pertaining to recording checks should be made to Accounts Payable. The correction of any errors to recording cash receipts should be made to Accounts Receivable.)

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