Question

At 30th September 2017, the balance in the cash account of woodsworth Co. was $9,300.00. The...

At 30th September 2017, the balance in the cash account of woodsworth Co. was $9,300.00. The bank statement for the same date shows a balance of $10,500.00.

On investigation of the difference between the two sums, it was established that:

A.) Cheques in the amount of $700.00 had not yet cleared the bank.

B.) A deposite in the amount of $450.00 was made late on the 30th September and was not shown on the bank statement.

C.) A cheque from Mrs. Jones to the amount of $190.00 was returned to the bank due to insufficent funds.

D.) A customer's note was collected by the bank on the company's behalf to the amount of $1,250.00 less $50.00 service fee to the bank.

E.) The bank charged $60.00 for processing fees.

Task:

1. Prepare a bank reconcilliation statement in good form as of September 30th 2017.

2. Journalize the necessary entries to bring the cash amount up-to-date.

Homework Answers

Answer #1

1

Woodsworth Co
Bank Reconciliation
As of September 30, 2017
Checkbook Balance Bank balance
Balance as per bank $ 10,500 Balance as per book $    9,300
Add Add
Deposit in transit   450 Note collected by bank $    1,250
Deduct Deductions
Outstanding checks   700 NSF Check $ 190
Bank service charges ($60+$50) $ 110
$        300
Adjusted bank balance $ 10,250 Adjusted cash balance $ 10,250

2)

Journal entries

Cash $ 1,200
Bank charges $        50
Note receivable $ 1,250
Accounts receivable $     190
Cash $     190
Bank charges $        60
Cash $        60
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