The Following Information Is Needed to Reconcile the Cash Balance

question 226

Essay

The following information is needed to reconcile the cash balance for Natural Landscaping Services.
• A deposit of $5,800 is in transit.
• Outstanding checks total $1,500.
• The book balance is $6,800 at February 28, 2019.
• The bookkeeper recorded a $1,740 check as $17,400 in payment of the current month's rent.
• The bank balance at February 28, 2019 was $18,000.
• A deposit of $400 was credited by the bank for $4,000.
• A customer's check for $3,700 was returned for nonsufficient funds.
• The bank service charge is $60.
Based on this information, prepare a bank reconciliation for Natural Landscaping Services as of February 28, 2019.

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Definitions:

Fixed Manufacturing Overhead

These are production costs that do not change with the level of production output, such as rent for factory buildings or salaries for factory management.

Overhead Applied

The portion of estimated manufacturing overhead cost that is charged to individual jobs based on the predetermined overhead rate.

Denominator Level

Refers to the total amount of capacity or activity base used to allocate fixed costs to products or services in cost accounting.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, calculated at the beginning of a period by dividing estimated overhead costs by an estimated activity base.