Problem 7-9A Preparing a bank reconciliation and recording adjustments LO6 Stewart Recording Studio, owned by Ron...
Problem 7-9A Preparing a bank reconciliation and recording adjustments LO6
Stewart Recording Studio, owned by Ron Stewart, showed the
following bank reconciliation at March 31:
| Stewart Recording Studio | |||||||||
| Bank Reconciliation | |||||||||
| March 31, 2020 | |||||||||
| Bank statement balance | $ | 21,300 | Book balance | $ | 29,825 | ||||
| Add: | |||||||||
| Deposit of March 31 in transit | 9,637 | ||||||||
| $ | 30,937 | ||||||||
| Deduct: | |||||||||
| Outstanding cheques: | |||||||||
| #14 | $ | 807 | |||||||
| #22 | 305 | 1,112 | |||||||
| Adjusted bank balance | $ | 29,825 | Adjusted book balance | $ | 29,825 | ||||
| Cash | Acct. No. 101 | ||||||||
| Date | Explanation | PR | Debit | Credit | Balance | ||||
| 2020 | |||||||||
| March | 31 | Balance | 29,825 | ||||||
| April | 30 | CR17 | 70,618 | 100,443 | |||||
| 30 | CD13 | 88,940 | 11,503 | ||||||
A list of deposits made and cheques written during April, taken
from the Cash Receipts Journal and Cash Disbursements Journal, is
shown below:
| Deposits Made | |||||
| April | 7 | $ | 682 | ||
| 13 | 4,544 | ||||
| 18 | 5,831 | ||||
| 23 | 13,736 | ||||
| 27 | 1,730 | ||||
| 30 | 44,095 | ||||
| Total April Cash Receipts | $ | 70,618 | |||
| Cheques Written | ||||||
| No. | 23 | $ | 5,133 | |||
| 24 | 3,113 | |||||
| 25 | 931 | |||||
| 26 | 302 | |||||
| 27 | 4,119 | |||||
| 28 | 4,900 | |||||
| 29 | 19,099 | |||||
| 30 | 39,760 | |||||
| 31 | 404 | |||||
| 32 | 11,179 | |||||
| Total April Cash Disbursements | $ | 88,940 | ||||
The following bank statement is available for April:
| Bank Statement | |||||||||||||||||
| To: Stewart Recording Studio | April 30, 2020 Bank of Canada |
||||||||||||||||
| Cheques/Charges | Deposits/Credits | Balance | |||||||||||||||
| 21,300 | |||||||||||||||||
| #31 | 04/03 | 404 | 04/03 | 9,637 | 30,533 | ||||||||||||
| #28 | 04/07 | 9,400 | 04/07 | 682 | 21,815 | ||||||||||||
| #26 | 04/13 | 302 | 04/13 | 4,544 | 26,057 | ||||||||||||
| NSF | 04/18 | 13,828 | 04/18 | 5,831 | 18,060 | ||||||||||||
| #24 | 04/23 | 3,113 | 04/23 | 13,736 | 28,683 | ||||||||||||
| #23 | 04/27 | 5,133 | 04/27 | 1,730 | 25,280 | ||||||||||||
| #29 | 04/30 | 19,099 | 04/30 | 112,000 | 118,181 | ||||||||||||
| PMT | 04/30 | 15,466 | 102,715 | ||||||||||||||
| INT | 04/30 | 384 | 102,331 | ||||||||||||||
| SC | 04/30 | 177 | 102,154 | ||||||||||||||
| NSF = Not Sufficient Funds |
SC = Service Charge |
PMT = Payment of Principal on the loan |
INT = Interest on Bank Loan |
||||||||||||||
- In reviewing cheques returned by the bank, the bookkeeper discovered that cheque #28, for delivery expense, was recorded in the Cash Disbursements Journal correctly as $4,900.
- The NSF cheque for $13,828 was that of customer Oprah Winney, deposited in March.
- On the bank statement, the payment for $15,466 is regarding a note payable.
- There is also a deposit of $112,000 dated April 30. It is an investment made by the owner into the business (the bank transferred the funds electronically from the owner’s personal account to his business account, which is why it was not recorded in the Cash Receipts Journal).
Required:
a. Prepare a bank reconciliation for Stewart Recording
Studio at April 30.
b. Prepare the necessary journal entries to bring
the General Ledger Cash account into agreement with the adjusted
balance on the bank reconciliation.
Homework Answers
![Stewart Recording Studio Bank Reconciliation April 30 Cash balance per cash book Add: [$9,400 - $4,900] Investment deposited](http://img.homeworklib.com/questions/c060ae10-4952-11ea-aa42-ad27d9a9c5c9.png?x-oss-process=image/resize,w_560)
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