Question

The following information is available for Pyle Garage for March, Year 2: BANK STATEMENT HAZARD STATE BANK 215 MAIN STREET HAZARD, GA 30321 Pyle Garage Account number 629 Main Street 62-00062 HAZARD, GA 30321 March 31, Year 2 Beginning balance 3/1/Year 2 $9,063 Total deposits and other credits 30,048 Total checks and other debits 24,959 Ending balance 3/31/Year 2 14, 152 Checks and Debits Deposits and Credits Check No. Amount Date Amount 1462 $3,789 March 1 $1,131 1463 1,676 March 2 6,539 1464 8,034 March 6 4,968 1465 2,936 March 12 6,204 1466 1,442 March 17 6,000 1467 6,217 March 22 2,120 DM 55 CM 3,086 1468 810

Answer 1

PYLE GARAGE Bank Reconciliation March 31, Year 2
Unadjusted Bank Balance, March 31,Year 2		$ 14,152
Add: Deposit in transit		$ 3,583
Less: Outstanding checks
Cheque # 1469	($ 1,534)
Cheque # 1470	($ 778)	($ 2,312 )
True cash balance, March 31, 2018		$ 15,423
Unadjusted book Balance, March 31,Year 2		$ 13,077
Add: Credit Memo for Collection of Account Receivable		$ 3,086
Less:
Error in recording check # 1468 ($ 810 (-) $ 125 )	($ 685 )
Debit Memo (or )Bank Service charges	($ 55)	($ 740 )
True cash balance, March 31, Year 2		$ 15,423

Item No	Affect on the cash Account
1	No Effect on cash Account
2	Increase in Cash Account balance
3	No Effect on cash Account
4	Decrease in Cash Account balance
5	No Effect on cash Account
6	Decrease in Cash Account balance

Answer 2

The following information is available for Pyle Garage for March, Year 2:

BANK   STATEMENT
HAZARD STATE BANK
215 MAIN STREET
HAZARD, GA 30321
Pyle Garage						Account number
629   Main Street						62-00062
HAZARD,   GA 30321						March 31, Year 2
Beginning balance   3/1/Year 2						$9,075
Total deposits and other   credits						30,123
Total checks and other   debits						25,054
Ending balance 3/31/Year   2						14,144
	Checks and Debits					Deposits and Credits
	Check No.		Amount			Date		Amount
		1462	$	3,798		March	1	$	1,145
		1463		1,688		March	2		6,550
		1464		8,045		March	6		4,981
		1465		2,947		March	12		6,212
		1466		1,451		March	17		6,009
		1467		6,222		March	22		2,130
		DM		63		CM			3,096
		1468		840

The following is a list of checks and deposits recorded on the books of Pyle Garage for March, Year 2:

Date			Check No.	Amount of Check			Date			Amount of Deposit
March	1		1463	$	1,688		March	1		$	6,550
March	5		1464		8,045		March	5			4,981
March	6		1465		2,947
March	9		1466		1,451		March	10			6,212
March	10		1467		6,222
March	14		1468		140		March	16			6,009
March	19		1469		1,542		March	19			2,130
March	28		1470		786		March	29			3,588

Other Information

1. Check no. 1462 was outstanding from February.

2. A credit memo for collection of accounts receivable was included in the bank statement.

3. All checks were paid at the correct amount.

4. The bank statement included a debit memo for service charges.

5. The February 28 bank reconciliation showed a deposit in transit of $1,145.

6. Check no. 1468 was for the purchase of equipment.

7. The unadjusted Cash account balance at March 31 was $13,071.

 

Required:

1. Prepare the bank reconciliation for Pyle Garage at the end of March.

2. Explain how the adjustments described above affect the cash account.