Question

Serial Problem Business Solutions LO P3 Santana Rey receives the March bank statement for Business Solutions on April 11, 2020. The March 31 bank statement shows an ending cash balance of $67,066. The general ledger Cash account, No. 101, shows an ending cash balance per books of $67,499 as of March 31 (prior to any reconciliation). A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following a. The bank erroneously cleared a $440 check against the company account in March that S.Rey did not issue. The check was actually issued by Business Systems. b. On March 25, the bank statement lists a $54 charge for the safety deposit box. Santana has not yet recorded this expense. c. On March 26, the bank statement lists a $114 charge for printed checks that Business Solutions ordered from the bank. Santana has not yet recorded this expense. d. On March 31, the bank statement lists $39 interest earned on Business Solutions's checking account for the month of March. Santana has not yet recorded this revenue. e. S. Rey notices that the check she issued for $136 on March 31, 2020, has not yet cleared the bank. f. S. Rey verifies that all deposits made in March do appear on the March bank statement. Required: 1. Prepare a bank reconciliation for Business Solutions for the month ended March 31, 2020. BUSINESS SOLUTIONS Bank Reconciliation March 31, 2020 Book balance Bank statement balance Add: Add: Deduct: Deduct: Adjusted bank balance Adjusted book balance

Answer 1

Business Solutions Bank Reconciliation March 31, 2020 Bank statement balance Add: Bank error 67499 440 67066 Book balance Add: Bank interest 440 67506 Deduct: Safety deposit rental 136 Charge for checks 67538 Deduct: Outstanding check 114 168 67370 Adjusted bank balance 67370 Adjusted bank balance

Journal Enteries Date Particulars Mar-31 Cash a/c To Bank Errors Dr. Debit in $ Credit in $ 440 440 136 Mar-31 Outstanding Checks a/c Dr. To Cash 136 Mar-31 Miscellaneous Expense a/c Dr. To Cash 168 Dr. Mar-31 Cash a/c To Interest Revenue 39