Question

Brown, Inc. received its bank statement for the month ended 12/31/23. The bank statement showed a balance of $8,810.11. The company's general ledger showed a balance of $8,204 .32. Required: (a) Prepare a bank reconciliation in good form (start in column D) & (b) Make all journal entries required by the reconciliation (start in column N) The following ten (10) items were discovered when comparing the bank statement to the books of the company:

1.     The bank charged check processing fees of $10.00.

2.     There was a $2,414.52 automatic withdrawal to pay the company equipment loan. Of the $2,414.52, $2,051.86 was for interest which had been accrued.

3.     The bank charged Brown’s account $20 for an NSF check. The check was returned to the company and the company will seek repayment of the $20 from the customer.

4.     A check for $100 .50 written by Brown & Gold, LLP was cleared by the bank on Brown, Inc.'s account.

5.     The bank collected a note receivable for Brown in the amount of $1,075 .50 and deposited it to Brown's account. The principal repayment was for $890; the balance was interest, which had not been accrued.

6.     The bank charged the company $55.00 to print new checks.

7.     The bank correctly cleared check #2501 for $82. The company bad recorded this check in its books for $820. The check had been written in payment of utilities.

8.     A $2,451 deposit was recorded on the company books on 12/31/23. The deposit was taken to the bank too late to be recorded on that day. The bank recorded the deposit on 1/2/24.

9.     Outstanding checks totaled $1,418.31.

10. Brown's income tax refund of $2,425 was directly deposited in the bank account. A receivable had been set up in 2023 in anticipation of the refund.

Answer 1