Question

Cornerstone Exercise 4-20 Bank Reconciliation Tiny Corp. prepares monthly bank reconciliations of its checking account balance. The bank statement indicated the following: Balance, beginning of the month $15,640 Service charge for October Interest earned during October 80 NSF check from Green Corp. (deposited by Tiny) for goods 615 purchased on account Note ($2,500) and interest ($75) collected for Tiny from a 2,575 customer An analysis of canceled checks and deposits and the records of Tiny revealed the following items: Checking account balance per Tiny's books $12,951 Outstanding checks as of October 31 1,410 Deposit in transit at October 31 750 Error in recording a check issued by Tiny. (Correct amount of the check is $606, but was recorded as a cash disbursement of $660. The check was issued to pay for merchandise originally purchased on account). Required: 1. Prepare a bank reconciliation at October 31, 2019, in proper form. Tiny Corp. Bank Reconciliation October 31, 2019 Cash balance from bank statement Add: Deposit in transit Less: Outstanding checks Adjusted cash balance Cash balance from company records Add: Interest earned Note and interest collected Error recording check Less: Service charge NSF check Adjusted cash balance

Answer 1

1)		Tiny corp
		Bank Reconciliation
	Cash balance from bank statement				15640
	Add:
	Deposit in transit				750
	less:
	outstanding checks				1,410
	Adjusted cash balance				14,980
	Cash balance from company records				12,951
	Add:
	Interest earned			80
	Note and interest collected			2575
	error recording check			54	2709
	less:
	Service charge			65
	NSF check			615	680
	Adjusted cash balance				14,980
2)	Bank service charge expense			65
	cash				65
	Cash			80
	interest income				80
	Accounts receivable			615
	cash				615
	Cash			2575
	notes receivable				2,500
	interest income				75
	Cash			54
	Accounts payable				54
3)	14,980