Question

Problem 6-21B Bank reconciliation and adjustments to the cash account The following information is available for Pyle Garage for March Year 1: BANK STATEMENT HAZARD STATE BANK 215 MAIN STREET HAZARD, GA 30321 Pyle Garage 629 Main Street Hazard, GA 30321 Account number 62-00062 March 31, Year1 Beginning balance V1/Year 1 Total deposits and other credits $15,000.00 7,000.00 Total checks and other debits 6,000.00 16,000.00 Ending balance 3/31/Year 1 Checks and Debits Deposits and Credits Amount $1,000.00 Check No. Amount Date 1462 $1,163.00 March March 2 1463 62.00 1,235.00 1,340.00 1464 March 6 210.00 1465 750.00 12 March 17 March 22 March 1,940.00 1466 1,111.00 855.00 1,480.00 175.00 1467 964.00 DM 15.00 CM 700.00 1468

Answer 1

Answer-a:

PYLE GARAGE BANK RECONCILIATION March 31 Bank: $ 16,000 Balance as per Bank Statement, March 31 Deposit in transit $ ADD: 2,000 $18,000 Outstanding checks: Check No. 1469 LESS: $ 1,500 Check No. 1470 102 $ $ 1,602 $ 16,398 Adjusted cash balance Books: $ 16,868 Balance as per depositor's record, March 31 Account receivable collected by bank $ 175 ADD: 17,043 Service charges Error on check No. 1468, (700 70) $ LESS: 15 630 $ $ 645 $ 16,398 Adjusted cash balance

Answer-b:

Journal Entry for Adjustment to Book Balance Account & Explanations Debit ($) Credit ($) Date Cash 175 Notes receivable Mar.31 175 (to record cash receipt) Service charges Equipment 15 630 Mar.31 Cash 645 (to record cash payment)

Note: The deposit in transit and outstanding check of February have already been included in February month's BRS. Hence no reflection of the same is required in March month's BRS.