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Audit quesiton related to bank reconciliation.

Required:

1)Prepare a corrected reconciliation

2) Prepare journal entries for items that should be adjusted prior to closing the books.

3) State the total misstatement of cash and whether it was an overstatement or understatement of cash.

Bank Reconciliation, December 31, 2015
Balance per ledger December 31, 2015			$27,253.85
Add:
	Cash receipts received on the last day of December and charged to "cash in bank" on books but not deposited		3,715.27
	Debit memo by bank for customers check returned unpaid and dishonored (check is on hand but no entry has been made on the books for check being returned)		450.00
	Debit memo by bank for bank service charge for December		35.00
			31,454.12
Deduct:
	Checks drawn but not paid by bank (see detailed list below)	$3,121.83
	Credit memo by bank for proceeds of a note receivable that had been left at the bank for collection but which has not been recorded as collected	1,200.00
	Checks for an account payable entered on books as $297.50 but drawn and correctly paid by bank as $694.50	397.00	(4,718.83)
Computed balance			26,735.29
Unlocated difference			416.44
Balance per bank (agreed with confirmation)			27,151.73
	Checks Drawn but Not Paid by Bank:
	No.	Amount
	573	$267.27
	724	39.92
	903	454.67
	907	291.80
	911	648.29
	913	737.52
	914	529.10
	916	36.00
	917	117.26
		$3,121.83

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