The cash receipts and the cash payments of Silver Hills Estates Development for November 2017 are as follows:

The Cash account of Silver Hills Estates shows a balance of $26,983 on November 30, 2017. Outstanding amounts from the previous month's bank reconciliation were cheque #1219 for $500, cheque #1218 for $400, and an October 31 deposit in the amount of $2,000. On December 3, 2017, Silver Hills Estates received this bank statement:

Explanations: EFT-electronic funds transfer, NSF-nonsufficient funds
Additional data for the bank reconciliation is as follows:
a. The EFT deposit was a receipt of monthly rent. The EFT debit was payment for monthly insurance.
b. The NSF cheque was received late in October from a customer.
c. The $1,430 bank collection of a note receivable on November 30 included $100 interest revenue.
d. The correct amount of cheque #1227, a payment on account, is $4,968. (The Silver Hills Estates Development accountant mistakenly recorded the cheque for $4,468.)
Required
1. Prepare the bank reconciliation of Silver Hills Estates Development at November 30,
2017.
2. Describe how a bank account and the bank reconciliation help Silver Hills' managers control the business's cash.
3. How are outstanding items from the previous month's bank reconciliation that clear on the November bank statement dealt with?

Transcribed Image Text:

Cash Receipts (Posting Reference is CR) Cash Payments (Posting Reference is CP) Date Cash Debit Cheque No. Cash Credit $1,819 1,144 13 15 19 24 30 Total $ 3,436 470 1,723 1,065 441 10,875 2,598 $20,608 1221 1222 1223 1224 1225 1226 1227 1228 1229 1230 Total 816 109 4,468 998 330 2,724 $12,948 Bank Statement for November 2017 Withdrawals Deposits Balance Forward Deposit EFT Rent Collection Deposit 9 2 Deposit Deposit Deposit Deposit Deposit 4,968 Chq#001219 Service Charge 10,629