Question

Lyleen Boat Company's bank statement for the month of September showed a balance per bank of $7,000. The company's Cash account in the general ledger had a balance of $5,459 at September 30. Other information is as follows:

 (1) Cash receipts for September 30 recorded on the company's books were $5,700 but this amount does not appear on the bank statement.

 (2) The bank statement shows a debit memorandum for $40 for check printing charges.

 (3) Check No. 119 payable to Mann Company was recorded in the cash payments joumal and cleared the bank for $248. A review of the accounts payable subsidiary ledger shows a $36 credit balance in the account of Mann Company and that the payment to them should have been for $284.

 (4) The total amount of checks still outstanding at September 30 amounted to $6,000.

 (5) Check No. 138 was correctly written and paid by the bank for $409. The cash payment joumal reflects an entry for Check No. 138 as a debit to Accounts Payable and a credit to Cash in Bank for $490.

 (6) The bank returned an NSF check from a customer for $360.

 (7) The bank included a credit memorandum for $1,560 which represents collection of a customer's note by the bank for the company; principal amount of the note was $1,500 and interest was $60. Interest has not been accrued.

 Instructions

 Prepare a bank reconciliation for Lyleen Boat Company at September 30.

 Prepare any adjusting entries necessary as a result of the bank reconciliation.

Answer 1

Answer a.

Answer b.

Answer 2

a) LYLEEN BOAT COMPANY

Bank Reconciliation Statement

September 30

Particulars	Amount	Amount
Cash Balance as per Bank		$ 7,000
Add: (1) Deposit in Transit		$ 5,700
		$ 12,700
Less : (4) Outstanding Chek		$ 6,000
Adjusted Cash Balance as per Bank		$ 67,000
Cash Balance as per Book		$5,459
Add: (5) Accounts Payable Error	$ 81
(7) Collect $ 1,500 note and interest $ 60	$ 1,560	$ 1,641
		$ 7,100
Less: (2) Cheque Printing	$ 40
(6) NSF Cheque	$ 360	$ 400
Adjusted Cash balance as per Bank		$ 6,700

Note : Item (3) is not a reconciling item

b) Adjusting Journal Entry's

Date	Account Title and Explanation	Debit	Credit
Sep. 30	Cash	$ 81
	Accounts Payable		$ 81
	(To correct error in recording cheque no.138)
Sep. 30	Cash	$ 1,560
	Note Receivable		$ 1,500
	Interest Revenue		$ 60
	(To record collection of Note Receivable and Interest by the Bank)
Sep 30	Miscellaneous Expenses	$ 40
	Cash		$ 40
	( To record cheque printing charges)
Sep 30	Accounts Receivable	$ 360
	Cash		$ 360
	( To record NSF cheque)