Activity 6In reconciling the cash balance on December 31,2019 with that shown in the bank balance, Red Company gathered the following facts:Balance per bank statement4,000,000Outstanding checks600,000 Deposit in transit475,000Service charge10,000Proceeds of bank loan, December 1, discounted for 6 months at 12%, not recorded on company books940,000Customer’s check charged back by bank for absence of counter signature50,000Deposit of P100,000 incorrectly recorded by bank as10,000Check of Rid Company charged by bank against Red Company account150,000Customer’s note collected by bank in favor of Red Company. Face 400,000 Interest 40,000 Total 440,000 Collection fee 5,000435,000Erroneous debit memo of December 28, to charge company’s account with settlement of bank loan200,000Deposit of Rid Company credited to Red account300,000Requirement: Prepare a bank reconciliation. Number55510,00055,00040,00025,00065,00070,000275,000761762763764165Receipts of August 31, deposited September 1UMThe bank statement showed the following charges:a. Service charge for Augustb. NSF check received froma customer5,00085,000The stub for check number 765 and the invoice relating thereto show that it was for P50,000.It was recorded incomectly inthe cash disbursements joumal as P70,000. This check was drawnin payment of anaccOunt payable. Paymet has been stopped oncheck number 555 which wasdrawn in payment of an account payable. The payee cannot be located. The cash balance perledger on August 31, 2019 isVAD C1946In a Nutshell (ULO 4)Activity 6Inreconciling the cash balance on December 31,2019 with that showninthe bank balance, RedCompany gathered the following facts:Balance per bank statementOutstanding checksDeposit in transitService chargeProceeds of bank loan, December 1, discounted for 6 months at12%, not recorded on company books4,000,000600,000475,00010,000940,000- 95-OUMCollege of Accounting Education3F, Business & Engineering BuildingMatina, Davao CityPhone No.: (082)300-5456 Local 137The University of MindanaoCustomer's check charged back by bank for absence of countersignatureDeposit of P100,000 incorrectly recorded by bank asCheck of Rid Company charged by bank against Red Company50,00010,000150,000accountCustomer's note collected by bank in favor of Red Company.FaceInterestTotalCollection fee400,00040,000440,0005,000435,000Erroneous debit memo of December 28, to charge company'saccount with settlement of bank loanDeposit of Rid Company credited to Red account200,000300,000Requirement: Prepare a bank reconciliation.Q&A listDo you have any question for clarification?Questions/IssuesArswers1.2.3.13.4.5.4.5.INDANOF MI

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Bank reconciliation statement: It is the statement that gives summary of reconciling bank account…