Question

The bank statement balance for Hot plate inc. as of March 31st is $5,150. Hot plates records show that there is $3,300 in deposits in transit and $5,000 in outstanding checks that have not cleared. The book cash balance on March 31st is $3,750. Reviewing the bank statement shows several transactions that perhaps should be recorded. On the bank statements there were service charges of $75; an NSF check in the amount of $250; and interest earned $25.

A. Calculate the reconciled company balance of cash for March. You do not need to do the actual reconciliation just give the balance.

B. Choose one of the items that needs to be recorded in the company's books and make the journal entry.

Answer 1

A.

Hot plate inc
Bank Reconciliation
At March 31
Bank statement balance	5,150	Book balance	3,750
Add:		Add:
Deposit in transit	3,300	Interest earned	25
	8,450		3,775
Less:		Less:
Outstanding check	-5,000	Bank service charges	-75
		NSF Check	-250
Adjusted bank balance	$3,450	Adjusted book balance	$3,450

The company balance of cash for March = $3,450.

B.

Date	General journal	Debit	Credit
Mar-31	Cash	$25
	Interest revenue		$25
	( To record interest earned on checking)
Mar-31	Accounts receivable	$250
	Cash		$250
	( To record NSF check)
Mar-31	Bank charges	$75
	Cash		$75
	( To record bank service charges)

Kindly comment if you need further assistance. Thanks