Question

Question 3 The bank portion of the bank reconciliation for Oriole Company at October 31, 2021, was as follows: ORIOLE COMPANY Bank Reconciliation October 31, 2021 Cash balance per bank $11,020 Add: Deposits in transit 1,530 12,550 Less: Outstanding cheques #2451 $1,300 #2470 910 #2471 836 #2472 542 #2474 1,050 4,638 Adjusted cash balance per bank $7,912 The adjusted cash balance per bank agreed with the cash balance per books at October 31. The November bank statement showed the following: ORIOLE COMPANY Bank Statement November 30, 2021 Cheques and Other Debits Date Number Amount Deposits Amount Oct. 31 $11,020 Nov. 3 2470 $910 $1,530 11,640 4 2471 836 10,804 5 2475 1,641 1,194 10,357 6 2474 1,050 9,307 7 2476 1,930 990 8,367 10 2477 600 7,767 13 2,575 10,342 14 2479 1,750 8,592 18 2480 1,330 1,353 8,615 21 1,722 10,337 25 NSF 270 2,567 12,634 26 2481 695 11,939 27 1,650 13,589 28 2486 900 EFT 2,490 15,179 28 2483 650 1,186 15,715 30 LN 2,260 13,455 Additional information from the bank statement: 1. The EFT of $2,490 is an electronic transfer from a customer in payment of its account. The amount includes $60 of interest that Oriole Company had not previously accrued. 2. The NSF for $270 is a $255 cheque from a customer, Pendray Holdings, in payment of its account, plus a $15 processing fee. The company’s policy is to pass on all NSF service charges to the customer. 3. The LN is a payment of a note payable with the bank and consists of $260 interest and $2,000 principal. 4. At November 30, the cash balance per books was $8,977. The bank did not make any errors. The cash records per books for November follow. Two errors were made by Oriole Company. Cash Payments Date Number Amount Date Number Amount Nov. 3 2475 $1,641 Nov. 18 2482 $597 3 2476 1,390 20 2483 650 4 2477 600 21 2484 815 6 2478 552 24 2485 945 8 2479 1,750 26 2486 900 10 2480 1,330 28 2487 1,230 14 2481 695 Total $13,095 Cash Receipts Date Amount Nov. 3 $1,194 7 990 12 2,575 17 1,353 20 1,277 24 2,567 27 1,650 28 1,186 30 1,368 Total $14,160 Prepare a bank reconciliation at November 30. (List items that increase balance as per bank & books first.) ORIOLE COMPANY Bank Reconciliation November 30, 2021 $ : : $ $ $ : $ : $ Prepare the necessary adjusting entries at November 30. (Note: The correction of any errors in the recording of cheques should be made to Accounts Payable. The correction of any errors in the recording of cash receipts should be made to Accounts Receivable.) (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Nov. 30 (To record receipt from customer & interest earned & to correct error) Nov. 30 (To record NSF cheque and other cash payments

Answer 1

1) ORIOLE COMPANY Bank Reconciliation November 30, 2021 $13,455 Balance per firm's books Add: $1,368 EFT from customers $14,823 Error in receipt recorded Balance per bank statement Add: Deposit in transit (Nov. 30) $8,977 $2,490 $445 [Including interest of $60] [Error = $1,722 - $1,277] $2,935 $11,912 Subtract: Outstanding checks 2451 2472 2478 2482 2484 2485 2487 $1,300 $542 $552 $597 $815 $945 $1,230 Subtract: NSF Check returned Note paid Error in pay check $270 $2,260 $540 [Including interest of $260] [Error = $1,930 - $1,390] $3,070 $5,981 $8,842 Adjusted cash balance per books Adjusted cash balance per bank $8,842

2) Adjusting entries: Date Credit Debit $2,490 Nov. 30 $2,430 [$2490 - $60] $60 Nov. 30 $445 $445 Nov. 30 $270 General Journal Cash Accounts Receivable Interest Revenue (To record NFT collection on account) Cash Accounts Receivable (To rectify error in recording collection) Accounts Receivable Cash (To record NSF check returned) Note Payable Interest Expense Cash (To record note payable paid with interest) Accounts Payable Cash (To rectify error in recording pay checks) $270 Nov. 30 $2,000 $260 $2,260 Nov. 30 $540 $540