Question

Madison Company's cash ledger reports the following for the month ending March 31 Deposits: $ Amount 1,800 1,180 No Checks: 541 542 Asunt $ 5,600 Date 3/4 3/11 3/18 3/25 3/26-3/31 543 3,500 2,800 $ 13,600 Cash receipts: Date 3/2 3/8 3/12 3/19 3/27 3/28 3/30 544 545 $12.00 Balance on March 1 Receipts Disbursements Balance on March 31 $ 6,200 13,600 (12,400) $ 7,480 Information from March's bank statement and company records reveals the following additional information a. The ending cash balance recorded in the bank statement is $8.603 b. Cash receipts of $2.800 from 3/26-3/31 are outstanding c. Checks 545 and 547 are outstanding. d. The deposit on 3/11 included a customer's check for $470 that did not clear the bank (NSF check) e. Check 543 was written for $2.600 for office supplies in March. The bank properly recorded the check for this amount. f. An automatic withdrawal for March rent was made on March 4 for $1.450. g. Madison's checking account earns interest based on the average daily balance. The amount of interest earned for March is $59. h. Last year, one of Madison's top executives borrowed $4,450 from Madison. On March 24. the executive paid $4,740 ($4,450 borrowed amount plus $290 interest) directly to the bank in payment for the borrowing IThe bank charged the following service fees: $38 for NSF check, $10 for automatic withdrawal for rent payment, and $28 for collection of the loan amount from the executive. 1. Prepare a bank reconciliation for March 31 (Amounts to be deducted should be indicated with a minus sian.) MADISON COMPANY Bank Reconciliation March 31 Company's Cash Balance Before reconciliation Bank's Cash Balance Before reconciliation

Answer 1

MADISON COMPANY Bank Reconciliation March 31   

Banks Cash Balance	Amount	Companys Cash Balance	Amount
Before (a)	$8,603	Before	$7,400
+ Deposit Outstanding (b)	$2,800	NSF Check (d)	$(470)
(-) Checks Outstanding (c)	$(1,800)	Error (e)	$(600)
After Reconciliation	$9,603	Rent (f)	$(1,450)
		Interest earned (g)	$59
		Note Collected (h)	$4,450
		Interest Earned on Note (h)	$290
		Service Fee (i)	$(76)
		After Reconciliation	$9,603