Question

The cash account of Tullis Company on April 30 indicated a balance of $30,941.84 after the transactions for the month had been had been posted. The bank statement indicated a balance of $37,471.92 on April 30. Comparison of the bank statement and the accompanying canceled checks and memorandums with Tullis' records reveal the following items: a. Checks outstanding totaled $10,299.28. b. A deposit of $5,756.72 representing the April 30 receipts was made too late to be included in the bank statement. c. A check from a customer for $250 was returned by the bank marked NSF. d. A check which was written for $137.88 and was cleared by the bank for that amount, was recorded in Tullis Company's accounting records for $181.08. The check was written to purchase office supplies. e. The bank collected a note for Tullis for $2,400. f. Bank service charges for August were $22.68. g. A Check written by another depositor with a similar account number was deducted by the bank from Tullis Company's account in error. The check was for $375. h. Interest earned on the checking account for the month was $192. Prepare a bank reconciliation statement: Tullis Company Bank Reconciliation April 30 Balance per bank: Balance per books: Additions: Additions: Deductions: Deductions: Adjusted Balance Adjusted Balance Journalize the necessary adjusting entries.

Answer 1

Solution 1:

Tullis Company
Bank Reconciliation - April 30
Bank's Cash balance		Company's cash balance
Particulars	Amount	Particulars	Amount
Ending balance as per Bank Statements	$37,471.92	Ending Balance as per cash books	$30,941.84
Additions:		Additions:
Outstanding Deposits	$5,756.72	Incorrect recording of check	$43.20
Bank Error	$375.00	Note collection	$2,400.00
		Interest earned	$192.00
Deductions:		Deductions:
Outstanding Checks	$10,299.28	NSF Cheque	$250.00
		Service Charge	$22.68
Up to date cash balance as per bank	$33,304.36	Up to date cash balance as per books	$33,304.36

Solution 2:

Journal Entries - Tullis Company
Date	Particulars	Debit	Credit
30-Apr	Cash Dr	$43.20
	To Office supplies		$43.20
	(To record correction entry of check)
30-Apr	Cash Dr	$2,400.00
	To Note receivables		$2,400.00
	(To record note collection by bank)
30-Apr	Cash Dr	$192.00
	To Interest revenue		$192.00
	(To record interest revenue)
30-Apr	Accounts receivables Dr	$250.00
	To Cash		$250.00
	(To record NSF check from customer)
30-Apr	Miscellenaeous expense Dr	$22.68
	To Cash		$22.68
	(Being service charge debited by bank)