Question

The Pharoah Boat Company's bank statement for the month of November showed a balance per bank of $8,900. The company's Cash account in the general ledger had a balance of $6,269 at November 30. Other information is as follows: (1) Cash receipts for November 30 recorded on the company's books were $6,390 but this amount does not appear on the bank statement. (2) The bank statement shows a debit memorandum for $50 for check printing charges. (3) Check No. 119 payable to Oriole Company was recorded in the cash payments journal and cleared the bank for $257. A review of the accounts payable subsidiary ledger shows a $18 credit balance in the account of Oriole Company and that the payment to them should have been for $275. (4) The total amount of checks still outstanding at November 30 amounted to $6,990. (5) Check No. 138 was correctly written and paid by the bank for $409. The cash payment journal reflects an entry for Check No. 138 as a debit to Accounts Payable and a credit to Cash in Bank for $490. (6) The bank returned an NSF check from a customer for $670. (7) The bank included a credit memorandum for $2,670 which represents a collection of a customer's note by the bank for the company; the principal amount of the note was $2,539 and interest was $131. Interest has not been accrued.

Answer 1

PHAROAH BOAT COMPANY Bank reconciliation For the Month Ended November 30 Bank Cash balance per bank statement Add Deposit in transit Subtotal Less: Outstanding checks Adjusted Cash balance per bank $8.900 $6,390 $6.990 $8,300 $6,269 81 Books: Cash balance per books Add: Account Payable Error Note Receivable and Interest Subtotal Less: Check printing charges NSF check Adjusted Cash balance per book $2.670 $9.020 $50 S670 $720 $8,300 2) Credit Debit $81 Date General Journal Nov. 30 Cash Accounts payable - Error in recording check (To correct error in recording) $81 Nov. 30 Cash $2.670 Note receivable Interest Income (To record collection of note receivable and interest by the bank) $2,539 $131 $50 Nov. 30 Miscellaneous expenses Cash (To record check printing charges) $50 $670 Nov. 30 Accounts receivable -NSF Check Cash (To record NFS check)