Question

FALL Асен Bank Reconciliation SATLY II Company has a cash balance in statement for the date shows a balance of 4 not yet cleared the bank. Also a deposit in the amoun y has a cash balance in its hooks on December 31. in the amount of $4,000. The bank same date shows a balance of $4900 Itc hserved that cheques in the amount of $500 had bank. Also a deposit in the amount of $400 was made late on the l of December and the bank due to insufficient funds. A customer's note wing up on the bank statement. A check from Mr. Smith in the amount of $100 was returned by to insufficient funds. A customer's note was collected by the bank on the company's chart in the ont of S1,100 less a S50 service fee to the heat Thehakha ditional debit memorandum of 30 to e company for other miscellaneous service fees. The counts clerk wrote a check to pay the Utilities expense in the amount of $300 but mistakenly wrote in the records as $200 (the bank cashed it for the correct 300 dollar amount) this error needs to be corrected. c. Prepare a bank reconciliation in good form as of December 31 d. Prepare the adjusting general journal entries required to correct SATLY II Company's books Date PR Debit Credit

Answer 1

Solution c:

SATLY II Company
Bank Reconciliation - December 31
Bank's Cash balance		Company's cash balance
Particulars	Amount	Particulars	Amount
Ending balance as per Bank Statements	$4,900.00	Ending Balance as per cash books	$4,000.00
Additions:		Additions:
Outstanding Deposits	$400.00	Note Collection (net of collection fee)	$1,050.00
Deductions:		Deductions:
Outstanding Checks	$500.00	NSF Cheque	$100.00
		Service charge	$50.00
		Incorrect recording of utilities expense	$100.00
Up to date cash balance as per bank	$4,800.00	Up to date cash balance as per books	$4,800.00

Solution d:

Journal Entries - SATLY II Company
Date	Particulars	Debit	Credit
31-Dec	Cash Dr	$1,050.00
	Expenses for collection Dr	$50.00
	To Note receivables		$1,100.00
	(To record note collection by bank)
31-Dec	Accounts Receivables Dr	$100.00
	To Cash		$100.00
	(Being cheque dishonored by bank)
31-Dec	Miscellaneous expense Dr	$50.00
	To Cash		$50.00
	(Being service charge debited by bank)
31-Dec	Utilities expense Dr	$100.00
	To Cash		$100.00
	(To record correction entry of utilities expense)