Question

Help Save & Exit On March 31, 2019, Home Decorating Pavilion received a bank statement showing a balance of $9,840. The balance in the firm's checkbook and Cash account on the same date was $10.745. The difference between the two balances is caused by the items listed below. a. A $3.260 deposit made on March 30 does not appear on the bank statement. b. Check 358 for $560 issued on March 29 and Check 359 for $1.480 issued on March 30 have not yet been paid by the bank C. A credit memorandum shows that the bank has collected a $1,300 note receivable and interest of $130 for the firm. d. A service charge of $40 appears on the bank statement. e. A debit memorandum shows an NSF check for $525. (The check was issued by Dane Jaris, a credit customer.) f. The firm's records indicate that Check 341 of March 1 was issued for $890 to pay the month's rent. However, the canceled check and the listing on the bank statement show that the actual amount of the check was $880. g. The bank made an error by deducting a check for $560 issued by another business from the balance of Home Decorating Pavilion's account. Required: 1. Prepare a bank reconciliation statement for the firm as of March 31, 2019 2. Record entries for any items on the bank reconciliation statement that must be journalized

Answer 1

A B C 1 HOME DECORATING PAVILION Bank Reconciliation Statement 2 March 31, 2019 3 $9,840 4 Balance on bank statement 5 Additions: $3,260 $ 560 $3,820 6 Deposit of March in transit Check incorrectly charged to account 7 $13,660 8 10 Deduction on outstanding checks: $ 560 Check 358 of March 29 11 $1,480 Check 359 of March 30 12 13 Total outstanding checks $ 2,040 14 15 Adjusted bank balance $ 11,620 $10,745 16 Balance in books 17 Additions: Note receivable and interest collceted by banl $ 1,430 18 10 $1,440 Correction of error recodring 341 $ 19 $12,185 20 21 Deductions: $ 525 NSF Check 22 40 $ Bank Service Charge 23 565 24 25 Adjusted book balance $11,620

A B C 1 HOME DECORATING PAVILION Bank Reconciliation Statement 2 March 31, 2019 4 Balance on bank statement 9840 5 Additions: 3260 Deposit of March in transit Check incorrectly charged to account 7 560 =+B6+B7 +C4+C7 8 9 10 Deduction on outstanding checks: Check 358 of March 29 560 11 1480 Check 359 of March 30 12. +B11+ B12 13 Total outstanding checks 14 15 Adjusted bank balance +C8- C13 10745 16 Balance in books 17 Additions: - 1300+130 Note receivable and interest collceted by bank 18 -890-880 +B18+B19 Correction of error recodring 341 19 +C16+C19 20 21 Deductions: NSF Check 525 22 Bank Service Charge +B22+B23 40 23 24 25 Adjusted book balance -+C20-C23 O N

General Journal Debit Credit Date $1,430 Mar 31, 2019 Cash $1,300 Notes receivable S 130 Interest income (To record the collection of note) Mar 31, 2019 Cash $ 10 $ Rent expense 10 (To correct the error) Mar 31, 2019 Accounts receivable $ 525 Cash S 525 (To record the NSF check) Mar 31, 2019 Miscellaneous expense $ 40 $ Cash 40 (To record the service charge)