Question

 PA5-3 Identifying Outstanding Checks and Deposits in Transit and Preparing a Bank Reconciliation and Journal Entries [LO 5-4, LO 5-5]

 [The following information applies to the questions displayed below.]

 The December bank statement and cash T-account for Stewart Company follow:

 There were no deposits in transit or outstanding checks at November 30.

 PA5-3 Part 3

 3. Prepare a bank reconciliation for December.

 PA5-3 Part 4

 4. Prepare any journal entries that the company should make as a result of the bank reconciliation. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

 PA5-3 Part 5 and 6

 5. After the reconciliation journal entries are posted, what balance will be reflected in the Cash account in the ledger?

 Balance in Cash Account = _______ 

 6. If the company also has $320 of petty cash on hand, which is recorded in a different account called Petty Cash on Hand, what total amount of Cash and Cash Equivalents should be reported on the December 31 balance sheet?

 Total Amount of Cash and Cash Equivalents = _______ 

Answer 1

Solution 3:

Stewart Company
Bank Reconciliation
At December 31
Bank statement		company's books
Ending balance per bank	$85,560	Ending balance per cash account	$94,020
Additions:		Additions:
Add: Deposits in Transit	$13,000	Interest earned	$60
	$98,560		$94,080
Deductions:		Deductions:
Less: Outstanding checks (170+4800)	$4,970	Less: Service charge	$170
		Less: NSF	$320
Upto date cash balance	$93,590	upto date cash balance	$93,590

Solution 4:

Journal Entries
No.	Account Title	Debit	Credit
1	Cash	$60
	Interest Revenue		$60
	(To record interest earned)
2	Miscellaneous Expenses	$170
	Cash		$170
	(To record bank service charges)
3	Accounts receivable- J. Left	$320
	Cash		$320
	(To record NSF Check)

Solution 5:

Balance in Cash Account = $93,590

Solution 6:

Total cash and cash Equivalent = $93590 + $320 = $93,910