Question

1. The bank statement for Allen Co. indicates a balance of $7,100.00 on June 30. The cash account balance had a balance of $3,975.00. Prepare bank reconciliation on the basis of the following information, and journalize the changes on the company's cash balance. Cash Receipts of $672 had been recorded on the company's books as $654, • Deposits in transit not record by the bank, $400 • Bank service charges, $20 Note collected by the bank and not yet notified to the company $1,550 including $50 interest • NSF check from a customer, $223 Checks outstanding, $2,200 Bank Statement Cash Balance - Company Total Total Journal Date Accounts Debit Credit

Answer 1

A - B c D EF Allen Co. Bank Reconciliation June 30 Company's Books | $7,100.00 Cash balance percompany's books Add: $400.00 Cash receipts recorded incorrectly $18.00 Proceeds of note collected by bank $1,500.00 Interest collected by bank $50.00 Bank Statement 4 Cash balance per bank statement 5 Add: 6 Deposit in transit $3,975.00 $1,568.00 10 Deduct: 11 Outstanding checks Deduct: ($2,200.00) NSF Check Bank service charges $5,300.00 Adjusted book balance (S223.00) ($20.00 ($243.00 $5,300.00 13 Adjusted bank balance Calculations are shown below: 7100 Bank Statement 4 Cash balance per bank statement 5 Add: 6 Deposit in transit Allen Co. Bank Reconciliation June 30 Company's Books Cash balance percompany's books Add: Cash receipts recorded incorrectly =672-654 Proceeds of note collected by bank =1550-ES Interest collected by bank 50 400 =SUM(E6E8) 10 Deduct: 11 Outstanding checks 1-223 IDeduct: -2200 NSF Check Bank service charges =SUMC4:C12) Adjusted book balance =E11+E12 =SUM(F4:F12) 13 Adjusted bank balance

Journal entries: Credit ($) Debit ($) 1,550.00 1 Account Titles and Explanation 2 Cash Notes receivable Interest revenue 5 (To record collection of notes receivable by bank) 1,500.00 50.00 20.00 7 Bank service charges expense 8 Cash 9 (To record payment of bank service charges) 20.00 18.00 12 18.00 11 Cash Accounts receivable 13 (To record payment received from customer) 14 15 Accounts receivable 16 Cash 17 (To record NSF check) 223.00 223.00