Question

Brief Exercise 4-27
Bank Reconciliation

Hula Corp. utilizes J.P. Morgan Chase in its banking transactions. For the month of August, 2019, J.P. Morgan Chase presented Hula with its bank statement as follows:

Balance, August 31, 2019	$64,900
Service charge for August	100
Interest earned during August	875
NSF check from Jeffrey Corp. (deposited by Hula)	450
Note ($11,000) and interest ($425) collected for Hula from a customer	11,425

Upon receiving the bank statement, Hula's accountants analyzed its cash transactions for possible reconciling items between its cash balance per books and J.P. Morgan Chase's cash balance:

Checking account balance per Hula’s books	$53,453
Outstanding checks as of August 31	3,700
Deposit in transit at August 31	3,940
Error in recording check 9288 issued by Hula	63

The correct amount of check 9288 is $770. It was recorded as a cash disbursement of $707 by mistake. The check was issued to pay for merchandise purchases. The check appeared on the bank statement correctly.

Required:

Prepare a bank reconciliation schedule at August 31, 2019, in proper form.

Hula Corp.
Bank Reconciliation
August 31, 2019
Cash balance from bank statement		$fill in the blank 1
Add:
Deposit in transit		fill in the blank 3
Less:
Outstanding checks		fill in the blank 5
Adjusted cash balance		$fill in the blank 6
Cash balance from company records		$fill in the blank 7
Add:
Interest earned during August	$fill in the blank 9
Note and interest collected	fill in the blank 11	fill in the blank 12
Less:
Recording error	$fill in the blank 14
Service charge	fill in the blank 16
NSF check	fill in the blank 18	fill in the blank 19
Adjusted cash balance		$fill in the blank 20

Answer 1