Question

Madison Company's cash ledger reports the following for the month ending March 31 Deposits: Anunt $ 1,700 2,000 Date 3/4 3/11 3/11 3/25 3/26-3/31 No Checkst 561 502 543 544 545 Date 3/2 3/8 3/12 3/19 3/27 3/28 3/30 3,400 2,500 $ 13,400 Amount $ 5,480 900 2.700 1.680 300 600 1.50 $13,000 Cash receipts SE Balance on March 1 Receipts Disbursements Balance on March 31 $ 5,900 13,400 (13,000) 56,300 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 $7,376 b. Cash receipts of $2,500 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 $460 that did not clear the bank (NSF check). e. Check 543 was written for $3,300 for office supplies in March. The bank properly recorded the check for this amount. t An automatic withdrawal for March rent was made on March 4 for $1.500 9. Madison's checking account earns interest based on the average daily balance. The amount of interest earned for March is $57 h. Last year, one of Madison's top executives borrowed 54150 from Madison On March 24. the executive paid $4,350 ($4150 borrowed amount plus $200 interest) directly to the bank in payment for the borrowing, The bank charged the following service fees: $34 for NSF check, $15 for automatic withdrawal for rent payment, and $22 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 sign) MADISON COMPANY Bank Reconciliation March 31 Company's Cash Balance Before reconciliation Bank's Cash Balance Before reconciation

Answer 1

Answer-:

Bank Reconciliation Statement is a summary of bank pass book that reconciles with entity's bank account in cash book.

1. Bank reconciliation Statement are as follows-:

  

Bank's Cash Balance Before Reconciliation Add: Deposits in Transit Less: Outstanding Check 545 Less: Outstanding Check 547 6300 57 Madison Company Bank Reconciliation 31-Mar Company's Cash Balance 7376 Before Reconciliation 2500 Add: Interest Earned -300 Add: Note collected - 1500 Add: Interest Earned on note Less: NSF check Less: Incorrect recording of Check 543 Less: Automatic withdrawal of Rent Less: Bank Service Charges 4150 200 -460 -600 - 1500 71 After Reconciliation 8076 After Reconciliation 8076

2. Journal entry for cash adjustments are as follows-:

  

Debit Credit Transactions A) Journal Entry General Journal Cash A/C......dr. To Notes Receivable To Interest Revenue 4350 4150 200 B) 460 600 Accounts Receivable(NSF Check.....dr Office Supplies....... dr Rent Expense......dr Service charge expense......dr To Cash a/c 1500 71 2631

Thankyou..............