Question

Please complete in excel

P8-25A Preparing a bank reconciliation and journal entries The December cash records of Dunlap Insurance follow Cash Receipts Cash Payments Cash Debit Check No. Cash Credit Date Dec. 4 S 860 $ 4,170 1416 510 1417 130 1418 530 14 650 17 1419 2,180 1,490 1420 1,440 1,850 1421 900 1422 630 Dunlap's Cash account shows a balance of $16,740 at December 31. On December 31, Dunlap Insurance received the following bank statement Bank Statement for December Beginning Balance S 13,600 Deposits and other Credits: EFT S 300 Dec. 4,170 Dec. 5 510 Dec. 10 Dec 15 530 2,180 Dec. 18 1,400 Dec. 22 BC 9,090 Checks and other Debits: 1,000 Dec. NSF Dec 11 (check no. 1416) 860 EFT Dec. 19 700 Dec. 22 (check no. 1417) 130 650 Dec. 29 (check no. 1418) Dec. 31 (check no. 1419) 1,940 (5,340) Dec. 31 SC 60 Ending Balance S 17,350 Explanations: BC-bank collection; EFT-electronic funds transfer NSF-nonsufficient funds checks; SC-service charge Additional data for the bank reconciliation follows: The EFT credit was a receipt of rent. The EFT debit was an insurance payment. a. b·The NSF check was received from a customer c. The $1,400 bank collection was for a note receivable. d. The correct amount of check 1419, for rent expense, is $1,940. Dunlaps controller mistakenly recorded the check for $1,490 Requirements 1. Prepare the bank reconciliation of Dunlap Insurance at December 31, 2015 2. Journalize any required entries from the bank reconciliation

Answer 1

1.

Dunlap Insurance
Bank Reconciliation
December 31, 2015
Bank Statement balance		17,350	Book balance		16,740
Add:			Add:
Deposit in transit		1,850	EFT receipt of rent	300
Bank error			Collection of note by bank	1,400
Deduct: Checks outstanding					1,700
1,420	1,440		Deduct:
1,421	900		Bank charges	60
1,422	630		NSF Cheque	1,000
		2,970	EFT Payment of insurance	700
			Error in recording of check # 1419 ($1,940-$1,490)	450
					2,210
Adjusted bank balance		16,230	Adjusted book balance		16,230

2.

Date	Title	Debit	Credit
Dec-31	Cash	1,700
	Rent revenue		300
	Note receivable		1,400
Jan-31	Bank service charges/Misc. expenses	60
	Accounts receivable	1,000
	Insurance expenses	700
	Rent expense	450
	Cash		2,210

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