Question

The following information is available for Pyle Garage for March, Year 2:

BANK STATEMENT HAZARD STATE BANK 215 MAIN STREET HAZARD, GA 30321
Pyle Garage 629 Main Street HAZARD, GA 30321						Account number 62-00062 March 31, Year 2
Beginning balance 3/1/Year 2						$9,055
Total deposits and other credits						30,008
Total checks and other debits						24,891
Ending balance 3/31/Year 2						14,172
	Checks and Debits					Deposits and Credits
	Check No.		Amount			Date		Amount
		1462	$	3,786		March	1	$	1,127
		1463		1,669		March	2		6,530
		1464		8,026		March	6		4,961
		1465		2,929		March	12		6,201
		1466		1,433		March	17		5,993
		1467		6,210		March	22		2,115
		DM		48		CM			3,081
		1468		790

   

The following is a list of checks and deposits recorded on the books of Pyle Garage for March, Year 2:

Date			Check No.	Amount of Check			Date			Amount of Deposit
March	1		1463	$	1,669		March	1		$	6,530
March	5		1464		8,026		March	5			4,961
March	6		1465		2,929
March	9		1466		1,433		March	10			6,201
March	10		1467		6,210
March	14		1468		115		March	16			5,993
March	19		1469		1,531		March	19			2,115
March	28		1470		771		March	29			3,578

Other Information

1. Check no. 1462 was outstanding from February.

2. A credit memo for collection of accounts receivable was included in the bank statement.

3. All checks were paid at the correct amount.

4. The bank statement included a debit memo for service charges.

5. The February 28 bank reconciliation showed a deposit in transit of $1,127.

6. Check no. 1468 was for the purchase of equipment.

7. The unadjusted Cash account balance at March 31 was $13,090.

Required:

1. Prepare the bank reconciliation for Pyle Garage at the end of March.

2. Explain how the adjustments described above affect the cash account.

Answer 1

Solution:

Bank Reconcilation for Pyle Garge at the end of March

b) Effect of Adjustments on Cash account: