Question

Brown Corporation’s bank statement for September 30 showed a balance of $2,625. The company's Cash account in its general ledger showed a $1,995 debit balance. The following information was also available as of September 30: A customer's note for $1,175 was collected by the bank; outstanding checks amounted to $1,345; a $15 checks printing fee was charged on September 30 bank statement; a $325 NSF check was returned to Brown Corporation; the September 30 cash receipts, $1,550, were placed in the bank's night depository after banking hours on that date and this amount did not appear on the September 30 bank statement.

REQUIRED:
(a) Prepare a bank reconciliation as of September 30.

(b) Prepare any necessary adjusting journal entries necessary as a result of the bank reconciliation.

Answer 1

	Brown Corporation
	Bank Reconciliation
	Sep-30
	Bank Statement Balance		2,625	Book Balance		1,995
	Add:			Add:
	Deposit in Transit	1,550		Note Colllection	1,175
	Deduct:			Deduct:
				SERVICE CHARGE	15
	Outstanding Checks	1,345
				NSF Check	325
	Adjusted Bank Balance		2,830	Adjusted Book Balance		2,830
	Journal Entries
	General Journal	Debit	Credit
1)	CASH	1,175
	Note Receivable		1,175
	(To record note receivable)
2)	Accounts Receivable	325
	Cash		325
	(To record NSF Check)
3)	Misc. Expense	15
	Cash		15
	(To record bank charges)