Question

Question text

Bank Reconciliation The bank reconciliation made by Winton, Inc., on August 31 showed:

Deposit in transit of		$2,560
Outstanding checks	no.597	$1,660
	no.603	$1,280
The reconciled cash balance on August 31 was		$28,220

The following bank statement is available for September:

Bank Statement
TO		Winton, Inc.									September 30
		St. Louis, MO									STATE BANK
Date		Deposits	No.		Date		Charges		Date		Balance
Sept.	1	$2,560	597		Sept.	1	$1,660		Aug.	31	$28,600
	2	2,240	607			5	3,700		Sept.	1	29,500
	5	1,700	608			5	2,200			2	31,740
	9	1,488	609			9	1,104			5	27,540
	15	2,720	610			8	1,280			8	26,260
	17	3,080	611			17	976			9	26,644
	25	2,056	612			15	1,348			15	28,016
	30	1,360	614			25	1,840			17	30,120
			NSF			29	2,056			25	30,336
			SC			30	72			29	28,280
										30	29,568
Item codes		EC: Error Correction			DM: Debit Memo				CM: Credit Memo
		SC: Service Charge			OD: Overdraft				RT: Returned Item
		IN: Interest Earned			NSF: Non-sufficient Funds

A list of deposits made and checks written during September is shown below:

Deposits Made				Checks Written
Sept.	1	$2,240		No.	607	$3,700
	4	1,700			608	2,200
	8	1,488			609	1,104
	12	2,720			610	1,280
	16	3,080			611	976
	24	2,056			612	1,492
	29	1,360			613	620
	30	2,532			614	1,840
		$17,176			615	772
					616	840
						$14,824

The Cash in Bank account balance on September 30 was $30,572. In reviewing checks returned by the bank, the accountant discovered that check No. 612 written for $1,348 for advertising expense, was recorded in the cash disbursements journal as $1,492. The NSF check written for $2,056, which Winton deposited on September 24, was a payment on account from customer D. Walker.

Required
a. Prepare a bank reconciliation for Winton, Inc., at September 30.
b. Prepare the necessary journal entries to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation.

Answer 1

a)

Winton, Inc.
Bank Reconciliation
September 30
Cash balance per bank statement		$   29,568
Add: Deposit in transit		$     2,532
		$   32,100
Less: Outstanding checks
#603	$   1,280
#613	$      620
#615	$      772
#616	$      840
		$     3,512
Adjusted bank balance		$   28,588
Cash balance per company records		$   30,572
Add: Error in recording of check #612 ($1,492-$1,348)		$        144
		$   30,716
Less:
NSF Check	$   2,056
Bank service charge	$        72
		$     2,128
Adjusted cash balance		$   28,588

b)

Date	Account title	Debit	Credit
Sep-30	Cash	$      144
	Advertising expenses		$      144
Sep-30	Accounts receivable	$   2,056
	Misc. expenses	$        72
	Cash		$   2,128

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