Question

On November 30, 2017, the cash account shows a balance of $38,000 before reconciliation. The bank statement for November does not include a deposit of $2,300 made on the last day on the month. The bank statement shows a collection by the bank of $940 and a customer check for $220 was returned because it is NSF. A customer’s check for $450 was recorded on the books as $540, and a check written for $79 for payment of an account for inventory was recorded as $97. What is the correct cash balance on November 30, 2017?

Prepare the required journal entries in the Company’s books after the bank reconciliation was made. Omit explanations.

Answer 1

Solution: Correct cash balance on November 30, 2017 is 38,648

Working:

Cash balance per books.	38,000
Less: NSF Checks	-220
Error in check written (=$97-$79)	18
Erron in inventory's check (=$450-$540)	-90
Direct collection by bank	940
Adjusted cash balance per books	38,648

　

Journal entries:

1) Dr. Account receivable $220

Cr. Cash $220

2) Ddr. Cash $18

Cr. Accounts payable $18

3) Dr. Inventory $90

Cr. Cash $90

4) Dr. Cash $940

Cr. Accounts payable $940