Question

The April 30 bank statement for KMaxx Company and the April ledger account for cash are summarized here:

BANK STATEMENT
	Checks		Deposits	Other		Balance
Balance, April 1						$6,000
April 5	#101	$ 700				5,300
April 9			$2,500			7,800
April 12	#102	200				7,600
April 19	#103	500				7,100
April 22	#104	1,000				6,100
April 27				EFT payment	$200	5,900
April 29				NSF check	100	5,800
April 30				Service charge	25	5,775

Cash (A)
April 1	Balance	6,000
April 8		2,500	700	April 2	#101
April 28		500	200	April 10	#102
			500	April 15	#103
			1,100	April 20	#104
			300	April 29	#105
April 30	Balance	6,200

No outstanding checks and no deposits in transit were noted in March. However, there are deposits in transit and checks outstanding at the end of April. The EFT involved an automatic monthly payment to one of KMaxx’s creditors. Check #104 was written for $1,100. The NSF check had been received from a customer.

1. Give any journal entries that should be made as a result of the bank reconciliation. TIP: Remember to make entries only for items that affect the company’s books, not the bank.

Answer 1

Solution:

Journal Entries - KMaxx Company
Date	Particulars	Debit	Credit
30-Apr	Accounts Payable Dr	$200.00
	To Cash		$200.00
	(To record EFT payment)
30-Apr	Accounts receivables Dr	$100.00
	To Cash		$100.00
	(To record NSF check from customer)
30-Apr	Service charges Dr	$25.00
	To Cash		$25.00
	(Being service charge debited by bank)