Question

5-5 MASTERY PROBLEM Reconciling a bank statement; journalizing a bank service charge, a dishonored check, and petty cash transactions James Astrup owns a business called LawnMow. Selected general ledger accounts are given below. 110 Cash 115 Petty Cash 120 Accts. Rec.-Bruce Kassola 30 Supplies Instructions: 140 Prepaid Insurance 320 James Astrup, Drawing 520 Miscellaneous Expense 530 Rent Expense 535 Repair Expense 540 Supplies Expense 550 Utilities Expense 1. Journalize the following transactions completed during August of the current year. Use page 20 of the journal given below. Source documents are abbreviated as follows: check, c; memorandum, M; calculator tape, T. Transactions: Aug. 21, Paid cash to establish a petty cash fund, $300.00. C110. 24. Paid cash for repairs, $165.00. C111. 26. Paid cash for supplies, $60.00. C112. 27. Received notice from the bank of a dishonored check from Bruce Kassola, 140.00, plus $35.00 fee; total, $175.00. M33. 28, Paid cash for miscellaneous expense, $31.00. C113. 31, Paid cash to owner for personal use, $400.00. C 114. 31. Paid cash to replenish the petty cash fund, $255.00: supplies, $125.00 miscellaneous expense, $130.00. C115 31. Received cash from sales, $350.00. T31 2. On August 31 of the current year,LawnMow received a bank statement dated August 30. Prepare a bank statement reconcililation. Use August 31 of the current year as the date. The following information is obtained from the August 30 bank statement and from the records of the business.

Answer 1

1.

GENERAL JOURNAL
Date	Account Titles and Explanation	Doc. No.	Post Ref.	Debit	Credit
Aug. 21	Petty cash	C110		300.00
	Cash				300.00
	(To record establishment of petty cash fund)
Aug. 24	Repair expense	C111		165.00
	Cash				165.00
	(To record cash paid for repairs)
Aug. 26	Supplies	C112		60.00
	Cash				60.00
	(To record cash paid for supplies)
Aug. 27	Accts. Rec.-Bruce Kassola	M33		175.00
	Cash				175.00
	(To record bank memo for dishonored check)
Aug. 28	Miscellaneous expense	C113		31.00
	Cash				31.00
	(To record cash paid for miscellaneous expense)
Aug. 31	James Astrup, Drawing	C114		400.00
	Cash				400.00
	(To record cash paid to owner for personal use)
Aug. 31	Supplies	C115		125.00
	Miscellaneous expense			130.00
	Cash				255.00
	(To record replenishment of petty cash fund)
Aug. 31	Cash	T31		350.00
	Sales				350.00
	(To record cash received from sales)

2.

LawnMow
Bank Reconciliation
August 31
Balance per bank statement		2721.00
Add: Outstanding deposit		350.00
		3071.00
Less: Outstanding checks
No. 114	400.00
No. 115	255.00	655.00
Adjusted balance per bank		2416.00
Balance per check stub		2431.00
Less: Bank service charge		15.00
Adjusted balance per check stub		2416.00

3.

GENERAL JOURNAL
Date	Account Titles and Explanation	Doc. No.	Post Ref.	Debit	Credit
Aug. 31	Miscellaneous expense	M34		15.00
	Cash				15.00
	(To record bank service charge)