The Unadjusted Cash Account Balance for Carson Company at December

Essay

The unadjusted cash account balance for Carson Company at December 31 is $12,615. The bank statement showed an ending balance of $18,250 at December 31. The following information is available from an examination of the bank statement and the company's accounting records:
$\begin{array}{llr} \text { Bank service charge } &\$20\\ \text {Outstanding checks } &7,500\\ \text { NSF check from a customer } &425\\ \text { Deposits in transit } &1,222\\\end{array}$
Check number 433 for the purchase of inventory was written correctly and paid by the bank correctly for $432, but was recorded on the books at $234. Carson uses the perpetual inventory system.Required:Prepare a bank reconciliation as of December 31.Indicate how each of the required adjusting entries impact the financial statements.