Question

Answer both questions

The following data were gathered to use in reconciling the bank account of Reddan Company: $25,750 19,140 Balance per bank Balance per company records Bank service charges Deposit in transit Note collected by bank with $200 interest Outstanding checks 2,300 5,200 3,755 Instructions 1. What is the adjusted balance on the bank reconciliation? 2. Journalize any necessary entries for Reddan Company based on the bank reconciliation.

Answer 1

1.

Reddan Company
Bank Reconciliation Statement
	$
Cash balance according to bank statement	25,750.00
Add: Deposits in transit	2,300.00
	28,050.00
Less: Outstanding checks	3,755.00
Adjusted balance	24,295.00
Cash balance according to company’s records	19,140.00
Add: Note collected by bank with $200 interest	5,200.00
Less: Bank service charge	45.00
Adjusted balance	24,295.00

2.

	Journal entries
No.	ACCOUNT TITLES AND EXPLANATIONS	DEBIT ($)	CREDIT ($)
(a)	Miscellaneous Expense	45.00
	Cash		45.00
	(To Record Bank service charges)
(b)	Cash	5,200.00
	Notes Receivable		5,000.00
	Interest Revenue		200.00
	(To record Note collected by bank)