Question

Problem 7-B Bank Reconciliation Dontuant At January 1, of the current year, the Bittersweet Company's balance of Cash was $6007 During the month of January, Bittersweet made deposits of $1,000 and wrote checks totaling $ 1,120. The bank's records, on the same date, show a balance of $500. The following information is available to reconcile these two balances: a the bank collected a $35 note receivable from one of Bittersweet's customers. The principal amount of the note was $30 with an additional $5 Included for interest. b) Bittersweet made a deposit, on January 31, for $40 that does not appear on the bank statement c) The following checks, written by Bittersweet, have not been cashed by January 31: 657 #59 $ 90 36 d) Bank service charges for the month were $10. a) A check written for $87, to Melon Company, was incorrectly recorded by Bittersweet as $78. The check was payment for supplies on account. A check written, and recorded, by Bittersweet for $15 was incorrectly charged by the bank as $51. g) A check, in the amount of $46, from the Orchid Company was returned by the bank for insufficient funds. Requirements: 1) Prepare a bank reconciliation, at January 31 of the current year, in good form. 2) Prepare the necessary journal entries at January 31 of the current year. 4 entries Jam I balance 600 Add's deposits 1,000 Less checks (11120) Balence for Bank 500 480 Balance for books of

Answer 1

Bank Reconciliation Summary
As of Jan 31, 2020
.
Opening Balance as per Cash account	$480.00		Balance per bank statement	$500.00
Additions:			Additions:
			Deposit in transit	$40.00
Deposits			Error in Cheque issued	$36.00
Note collected by bank	$35.00
Total Additions	$35.00		Total Additions	$76.00
Deductions:			Deduction:
			Outstanding cheques not cashed in bank
Cheques issues			#57	$90.00
Bank Charges	$10.00		#59	$36.00
Error in Chequee to Melon Co	$9.00
Cheue returned NSF	$46.00
Total Deductions	$65.00		Total Deductions	$126.00
Adjusted GL Balance	$450.00		Adjusted Bank Balance	$450.00
Journal Entries
Bank Account	Dr		$35.00
Notes Receivable	Cr			$30.00
Interest Income	Cr			$5.00
Bank Charges	Dr		$10.00
Bank Account	Cr			$10.00
Melon Co (Accounts Payable)	Dr		$9.00
Bank Account	Cr			$9.00
Accounts Receivable (Orchid Co)	Dr		$46.00
Bank Account	Cr			$46.00