Banana Company’s bank balance on its October 31, 2008 bank statement is $12,500. Banana’s accountant is preparing a cash reconciliation and determined that three cheques issued by Banana to its suppliers for a total of $8,500 had not yet cleared the bank. Also, a deposit for $1,500 made by Banana on October 31 did not appear on the bank statement. Bank service charges of $150 appear on the bank statement, but have not yet been recorded in the general ledger.
Required:
Prepare the cash reconciliation to determine the corrected cash balance that should be reflected in Banana’s general ledger as at October 31, 2008.