Question

The cash balance per books for Wellmeyer Company on November 30, 2022, is $10,740.93. The following checks and receipts were recorded for the month of December 2022: Checks Receipts No. Amount No. Amount Amount Date 17 $372.96 22 $ 578.84 $ 843.86 12/5 18 780.62 23 1,687.50 941.54 12/21 19 157.00 24 921.30 808.58 12/27 20 587.50 25 246.031,367.00 12/31 21 234.15 In addition, the bank statement for the month of December is presented below: Balance Deposits and Credits Checks and Debits Balance Last Statement No. Total Amount No. Total Amount This Statement $5,404.84 5 $9,578.36 10 $3,632.19 $11,351.01 Checks and other debits Deposits Date Balance No. Amount No. Amount No. Amount 14 148.29 17 372.9622 578.845,484.38 12/1 $9,875.13 18 708.62 24 921.30 843.86 12/8 $9,219.03 19 157.00 25 246.03 941.54 12/23 $9,541.58 21 234.15 15.00 SC 808.58 12/29 $10,101.01 250.00 NSF 1,500.00 CM 12/31 $11,351.01 Symbols: NSF (Not sufficient funds) SC (Service charge) CM (Credit Memo) Check No. 18 was correctly written for $708.62 for a payment on account. Check No. 14 was the only outstanding check at the end of November. There was also one deposit in transit at the end of November. The NSF check was from S. Gill, a customer, in settlement of an account receivable. An entry has not been made for the NSF check. The credit memo is for the collection of a note receivable including interest of $60 that has not been accrued. The bank service charge is $15.00. Instructions (a) Prepare a bank reconciliation at December 31. (b) Prepare the adjusting journal entries required by the bank reconciliation.

Answer 1

Bank Reconciliation is a process of identifying the difference that exist between the company's bank balance as per bank statement supplied by bank and cash balance as per company's accounting records.

Ans a Wellmeyer Company Bank Reconciliation Dec 31, 2022 Amount Amount Ans b: Journal Entry Particulars Bank Balance Dec, 31 Add: Deposit in Transit $11,351.01 Credit Debit $1,500 $1,367.00 $12,718.01 $1,440 $60 $72 $587.50 $1,687.50 Sr.No Date Particulars 1 Dec 31, 2022 Cash Notes Receivable Interest Income (To record repayment of notes receivable) 2 Dec 31, 2022 Cash Accounts Payable (To record rectification entry) 3 Dec 31, 2022 Accounts Receivable Cash (To record NSF check) 4 Dec 31, 2022 Bank Service Charges Expense Cash (To record bank chanrges) $72 ($2,275.00) $10,443.01 Deduct: Outstanding Check 20 Outstanding Check 23 Total Deduction Adjusted Bank Balance Cash Balance Dec, 31 (Note (0)] Add: Collection of Note Receivable Interest on note receivable Error in posting ($780.62-$708.62] $250 $250 $9,136.01 15 $15 $1,440.00 $60.00 $72.00 $1,572.00 $10,708.01 Deduct: NSF Check Bank Service Charges Expense Total Deduction Adjusted Book Balance $250.00 $15.00 ($265.00) $10,443.01 Note (i) Balance as per Book on Nov 30,2022 Add: Receipts for Dec 2022 Less:Payment for Dec 2022 Balance as per Book on Dec 31, 2022 $10,740.93 $3,960.98 ($5,565.90) $9,136.01