Answer:
1. Damon Company
Bank Reconciliation Statement
October 31, 2018
Bank Balance
Amount$
Bank cash balance as per statement 11,725
Add: Adjustment
Deposits outstanding 3,025
(74,320 - 71,295)
Bank error 300
Less: Adjustment
Check outstanding 1,485
(72,467 - 70,983)
Bank balance as per Reconciliation $13,567
Company's Cash balance
Amount$
Company's Cash balance as per General Ledger 8,397
Add: Adjustment
Interest earned 320
Note collected 5,000
Less: Adjustment
Bank service fees 150
Company's Cash balance as per Reconciliation 13,567
Thus, the accurate cash balance as of December 31, 2016 is $13,567
2. Required entries to modify the cash balance.
Date Account Title and Explanation Debit Credit
31 Oct Cash $5,320
Notes Receivables $500
Interest revenue $320
(For recording cash increase)
Date Account Title and Explanation Debit Credit
31 Oct Service charges $150
Cash $150
(For recording cash decreases)
