Question

Bank Reconciliation On November 30, Brown Sugar Plc has the below information related to cheques and cash:

1. The bank balance as per the accounting records of the company amounts to $42,500 and the bank balance as per the bank statement amounts to $37,758.

2. Collected cash of $6,244 on November 30 will be transferred to the Bank on December 1.

3. In the Bank Statement there is a credit of $167 showed as interest earned for November.

4. There are two Outstanding Cheques N0 921 of amount $964 and N0 925 of amount $1,085.

5. In the Bank Statement there is a debit of $14 shown as Bank Service Charges, NonSufficient-Funds Cheque of Mr. Sweet with $700.

Required:

a. Prepare a Bank reconciliation statement on November 30.

b. Prepare the necessary journal entries after the preparation of the Bank reconciliation.

Answer 1

Answer a

$42,500.00 BANK RECONCILIATON At Nov 30 Updates to Bank statement Updates to company's books Ending cash balance per bank statement $37,758.00 Ending cash balance per books Add: Add: Deposits in transit $6,244.00 Interest $167.00 $ 6,244.00 Deduct: Deduct: Outstanding checks $ 2,049.00 Service charges $ 14.00 NSF check $ 700.00 $ 2,049.00 $ 167.00 $ 714.00 Up to date ending cash balance $41,953.00 Up to date ending cash balance $41,953.00

Answer b

Bank A/c	$ 167
To Interest income		$ 167
Debtor a/c (NSF funds)	$ 700
Bank Service Changes A/c	$   14
To Bank a/c		$ 714

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