Question

Presented below is information related to Collin, Inc. Balance per books at August 31, $19,580.35; Receipts per books$185,680.86; disbursements per books. $191,600.09.

The balance per bank statement as of September 30, $17,780.63.

The following checks were outstanding at September 30.

5641 $1,856.21

5642 953.40

5644 2,681.27

5645 300.00

Included with the September bank statement and not recorded by the company were a bank debit memo for $31.00 covering bank charges for the month, a debit memo for $859.46 for a customer’s check returned and marked NSF, and a credit memo for$900 representing bond interest collected by the bank in the name of Wizards Inc. Cash on hand at September 30 recorded and a waiting deposit amounted to $1,680.91.

Instructions(a) Prepare a bank reconciliation (to the correct balance) at September 30, for Wizards Inc .from the information above. (b) Prepare any journal entries required to adjust the cash account at September 30.

Answer 1

Solution

(a)

Bank	Amount	Books	Amount
Balance, September 30	$17,780.63	Balance, September 30	$13661.12
Add		Add
Deposit in transit	$1,680.91	interest revenue earned	$900
Less outstanding Checks		Less
5641 -$1856.21		NSF check	($859.46)
5642-953.50		Less bank service charge	($31)
5644-$2681.27
5645-$300.00	($5790.88)
Adjusted bank balance	$13670.66	adjusted bank balance	$13670.66

Ending balance as per books = cash balance per books as per September 1+ total cash receipts for September - total amount of disbursement in September

=$19580.35 +$185680.86-$191,600.09

=$13661.12

(b)

Transaction	General journal	Debit	Credit
1.	Cash. Dr	$900
	To interest revenue		$900
2	Bank service charge	$31
	To cash		$31
3	Account receivable. Dr	$859.46
	To cash		$859.46