Question

PROBLEM 4: 25 POINTS White Water Kayak Company's bank statement for the month of September showed a balance per bank of $6,900. The company's Cash account in the general ledger had a balance of $5,573 at September 30. Other information is as follows: (1) Cash receipts for September 30 recorded on the company's books were $5,850 but this amount does not appear on the bank statement (2) The bank statement shows a debit memorandum for $25 for check printing charges Check No. 119 payable to Blacque Company was recorded in the cash payments joumal and cleared the bank for $236. A review of the accounts payable subsidiary ledger shows a $27 credit balance in the account of Bilacque Company and that the payment to them should have been for $263. The total amount of checks still outstanding at September 30 amounted to $4,800. (3) (4) (5) Check No. 148 was correctly written and paid by the bank for $408. The cash payment journal reflects an entry for Check No. 148 as a debit to Accounts Payabie and a credit to Cash in Bank for $480. (6) The bank returned an NSF check from a oustomer for $340. The bank included a credt memorandum for $2,670 which represents oolection of a customer's note by the bank for the company: principal amount of the note was $2,600 and interest was $70. Interest has not been acorued Instructions Prepare a bank reconciliation for White Water Kayak Company at September 30 (a) (b)Prepare any adjusting entries necessary as a result of the bank reconciliation

Answer 1

Answer 1 WHITE WATER COMPANY Bank Reconciliation September, 30 Cash Balance per Bank Add: (1) Deposit in transit $6,900 $5,850 $12,750 $4,800 $7,950 Less: (4) Outstanding checks Adjusted Cash Balance per Books $5,573 Cash Balance per Books Add: (5) Accounts Payable Error (7) Collect $2,600 note and interest $70 $72 $2,670 $2,742 $8,315 Less: (2) Check printing (6) NSF Check Adjusted Cash Balance per Books $25 $340 $365 $7,950

Credit 2 Journal Entry Date General Journal Sept. 30 Cash Accounts Receivable (To record the correct error in recording Check No. 148) Debit $72 $72 Sept. 30 $2,670 Cash Notes Receivable Interest Revenue (To record collection of note receivable and interest by the bank) $2,600 $70 $25 Sept. 30 Miscellaneous Expense Cash (To record the check printing charges) $25 Sept. 30 $340 Accounts Receivable Cash (To record the NSF check) $340