Preparing a bank reconciliation and journal entries [20 min]The October 31 bank statement...

Preparing a bank reconciliation and journal entries [20 min]

The October 31 bank statement of White’s Healthcare has just arrived from Stat Bank. To prepare the bank reconciliation, you gather the following data:

a. The October 31 bank balance is $5,170.

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b. The bank statement includes two charges for NSF checks from customers. One is for $420 (#1), and the other is for $120 (#2).

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c. The following White checks are outstanding at October 31:

Check No.	Amount
237	$     90
288	150
291	580
294	590
295	10
296	150

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d. White collects from a few customers by EFT. The October bank statement lists a $1,400 EFT deposit for a collection on account.

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e. The bank statement includes two special deposits that White hasn’t recorded yet: $1,050, for dividend revenue, and $50, the interest revenue White earned on its bank balance during October.

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f. The bank statement lists a $70 subtraction for the bank service charge.

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g. On October 31, the White treasurer deposited $290, but this deposit does not appear on the bank statement.

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h. The bank statement includes a $700 deduction for a check drawn by Multi-State Freight Company. White notified the bank of this bank error.

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i. White’s Cash account shows a balance of $2,700 on October 31.

Requirements

1. Prepare the bank reconciliation for White’s Healthcare at October 31, 2012.

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2. Journalize any required entries from the bank reconciliation. Include an explanation for each entry.