Question

E7-22 Preparing a bank reconciliation 

Jim Root Corporation operates four bowling alleys. The business just received the October 31, 2018, bank statement from City National Bank, and the statement shows an ending balance of $910. Listed on the statement are an EFT rent collection of $440, a service charge of $7, NSF checks totaling $50, and a $23 charge for printed checks. In reviewing the cash records, the business identified outstanding checks total- ing $440 and a deposit in transit of $1,800. During October, the business recorded a $260 check by debiting Salaries Expense and crediting Cash for $26. The business's Cash account shows an October 31 balance of $2,144.

Requirements

 1. Prepare the bank reconciliation at October 31.

 2. Journalize any transactions required from the bank reconciliation.

Answer 1

Jim Root Corporation
Bank Reconciliation
October 31, 2018
Cash balance according to bank statement		910
Adjustments:
Deposit in transit	1,800
Outstanding check	-440
Total adjustments		1,360
Adjusted balance		$2,270
Cash balance according to company's record		2,144
Adjustments:
EFT rent collection	440
Correction of book error	-234
Bank service charge	-7
NSF Check	-50
Check printing charge	-23
Total adjustments		126
Adjusted balance		$2,270

Date	General Journal	Debit	Credit
October 31, 2018	Cash	$440
	Accounts receivable		$440
	( To record EFT rent collection)
October 31, 2018	Accounts receivable	$50
	Cash		$50
	( To record NSF check)
October 31, 2018	Salary expense	$234
	Cash		$234
	( To correct error in recording check)
October 31, 2018	Bank service charge	$7
	Cash		$7
	( To record bank service charge)
October 31, 2018	Printing charge	$23
	Cash		$23
	( To record check printing charges)

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