Question

Exercise 8-12

Exercise 8-12 The information below relates to the Cash account in the ledger of Mi Minton Company. Cash deposited-$64,150. Balance September 1-$17,090; Balance September 30-$17,804; Checks written-$63,436. The September bank statement shows a balance of $16,822 on September 30 and the following memoranda. Credits Debits $1,730 NSF check: Richard Nance Collection of $1,690 note plus interest $40 Interest earned on checking account $625 $55 Safety deposit box rent $75 At September 30, deposits in transit were $4,650, and outstanding checks totaled $2,583 Prepare the bank reconciliation at September 30. (List items that increase cash balance first.) MINTON COMPANY Bank Reconciliation September 30

Answer 1

MINTON COMPANY

Bank Reconciliation

September 30                                                         

     Cash balance per bank statement...................................                     $16822

     Add: Deposits in transit..................................................                       $4650

                                                                                               $21472

     Less: Outstanding checks...............................................                       $2583

     Adjusted cash balance per bank......................................                     $18889

     Cash balance per books..................................................                     $17804

     Add: Collection of note receivable ($1690 + $40)...............     $1,730

            Interest earned.......................................................        $55     $1,785

                                                                                                                $19589

     Less: NSF check.............................................................        $625

              Safety deposit box rent..........................................          $75          $700

     Adjusted cash balance per books.....................................                     $18889

Journal entries

Date	Account title	Debit	Credit
	Cash	$1730
Sep 30	Notes Receivable		$1690
	Interest Income		$40
	(Collection made by the bank for a note plus interest.)
Sep 30	Cash	$55
	Interest Income		$55
	(interest earned on checking account)
Sep 30	Accounts Receivable	$625
	Cash		$625
	(NSF check from Richard Nance)
Sep 30	Bank fees	$75
	Cash		$75
	(Safety deposit box rental fees for the month.)