Question

Note the following information related to a company’s cash account : Cash Balance per Bank Cash...

Note the following information related to a company’s cash account : Cash Balance per Bank Cash balancer per bank, 12/31/19 9,610 Check #6832 cleared the bank for $240, but erroneously recorded by company for $268 Outstanding checks 2,417 Deposit by ABC Inc erroneously recorded to the company by the bank 486 NSF check returned by bank 281 Cash balance per books, 12/31/19 7,430 December 2019 interest per bank 30 Check mailed to bank for a deposit that had not reached the bank by 12/31/19 500 Prepare a bank reconciliation for the company for the month ended December 2019.

Prepare any journal entries that should be made based on the reconciliation prepared.

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Answer #1

Bank Reconciliation

Bank

Books

Balance, 12/31/19

 9,610

Balance, 12/31/19

 7,430

Add:

Add:

Deposit in transit

 500

Correction of book error

 28

Interest revenue

 30

Less:

Less:

Outstanding checks

- 2,417

NSF check

- 281
Correction of bank error - 486

Adjusted bank balance

 $7,207

Adjusted book balance

$7,207

Journal

12/31/19 Cash 28
Accounts payable 28
12/31/19 Accounts receivable 281
Cash 281
12/31/19 Cash 30
Interest revenue 30
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