Question

Data Table a. The August 31 bank balance is $5,180. b. The bank statement includes two charges for NSF checks from customers. One is for $440 (#1), and the other is for $140 (#2). c. The following Wollaston Healthcare checks are outstanding at August 31: Check No. 237 Amount $ 90 288 140 291 550 294 630 295 50 296 50 d. Wollaston collects from a few customers by EFT. The August bank statement lists a $1,600 EFT deposit for a collection on account. The bank statement includes two special deposits that Wollaston hasn't recorded yet: $700 for dividend revenue, and $60 for the interest revenue Wollaston earned on its bank balance during August. f. The bank statement lists a $80 subtraction for the bank service charge. g. On August 31, the Wollaston treasurer deposited $330, but this deposit does not appear on the bank statement. h. The bank statement includes a $400 deduction for a check drawn by Multi-State Freight Company. Wollaston notified the bank of this bank error. i. Wollaston's Cash account shows a balance of $2,700 on August 31.

Answer 1

Solution Question No.1

Wollaston Healthcare
Bank Reconciliation August 31,2018
Balance as per Bank statement		$         5,180
Add:-		$            730
Deposits not accounted by bank	$       330
Error to be reversed by bank	$       400
Less:-
Outstanding checks to be cleared by bank	$   1,510	$         1,510
Adjusted cash balance		$         4,400
Balance as per Wollaston's bank book		$         2,700
Add:-
Dividend revenue not accounted in books	$       700
Interest revenue not accounted in books	$         60
EFT collections not accounted in books	$   1,600
Less
Bank charges not accounted in books	$       580
Service charges not accounted in books	$         80
Adjusted cash balance		$         4,400

Solution Question No.2

EFT collection accounted in books

Date	Accounts / explanation	Debit	Credit
31st Aug	Cash Account	$   1,600
31st Aug	Accounts Receivables		$                  1,600
(The EFT collection from customer credited by bank now accounted in books)

Dividend revenue Journal entry

Date	Accounts / explanation	Debit	Credit
31st Aug	Cash Account	$       700
	Dividend Revenue		$                      700
(Dividend received credited by bank now accounted in books)

Interest revenue Journal entry

Date	Accounts / explanation	Debit	Credit
31st Aug	Cash Account	$       700
	Interest received		$                      700
(Interest received credited by bank now accounted in books)

NSF check service charges - Journal entry

Date	Accounts / explanation	Debit	Credit
31st Aug	Bank charges NSF (#1)	$       440
31st Aug	Bank charges NSF (#2)	$       140
31st Aug	Cash Account		$                      580
(The bank service charges for NSF debited by bank now accounted in books)

Bank charges - Journal entry

Date	Accounts / explanation	Debit	Credit
31st Aug	Bank charges NSF (#1)	$         80
31st Aug	Cash Account		$                        80
(The bank service charges debited by bank now accounted in books)