Question

Serial Problem Business Solutions LO P3

Santana Rey receives the March bank statement for Business Solutions on April 11, 2018. The March 31 bank statement shows an ending cash balance of $68,066. A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following.

S. Rey notices that the bank erroneously cleared a $560 check against her account in March that she did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Business Systems.

On March 25, the bank lists a $59 charge for the safety deposit box expense that Business Solutions agreed to rent from the bank beginning March 25.

On March 26, the bank lists a $114 charge for printed checks that Business Solutions ordered from the bank.

On March 31, the bank lists $42 interest earned on Business Solutions’s checking account for the month of March.

S. Rey notices that the check she issued for $124 on March 31, 2018, has not yet cleared the bank.

S. Rey verifies that all deposits made in March do appear on the March bank statement.

The general ledger Cash account, No. 101, shows an ending cash balance per books of $68,633 as of March 31 (prior to any reconciliation).

PART 2. Prepare any necessary adjusting entries. Use Miscellaneous Expenses, for any bank charges. Use Interest Revenue, for any interest earned on the checking account for the month of March. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

		Bank Reconciliation
	Balance as per bank statement					68,066
	Add:Error made by bank					560
						68,626
	less:
	Checks oustanding					124
	Adjusted bank balance					68,502
	Balance as per cash book					68,633
	Add:
	interest earned					42
						68,675
	less:
	Safety deposit box expense				59
	printing charges				114	173
	Adjusted cash balance					68,502
	Adjusting entries
	General Jouranl				Debit	Credit
	Cash				42
	interest revenue					42
	Miscellaneous expense				173
	cash49+114)					173