Question

The following data were gathered to use in reconciling the bank account of East Meets West Company:

Balance per bank $18,340

Balance per company records 6,480

Bank service charges 50

Deposit in transit 2,500

Note collected by bank with $250 interest 8,250

Outstanding cheques 7,160

NSF cheque for Scott accounts receivable 1000

1. Prepare a bank reconciliation for East Meets West Company.

2. Journalize any necessary entries for East Meets West Company based on the bank reconciliation.

Answer 1

1)

Balance asper bank	18340	Balance asper books	6480
Add: Deposit in transit	2500	Add: Note collected by bank	8250
Less: Outstanding cheque	(7160)	Less: Bank service charge	(50)
		Less: NSF Cheque	(1000)
Adjusted Cash Balance at bank	13680	Adjusted Cash Balance at book	13680

2)

Bank service Charge a/c	50
Cash a/c		50
(Service Charged by bank)
Cash a/c	8250
Note Receivable a/c		8000
Interest Receivable a/c		250
(Not collected by bank)
Accounts Receivable a/c	1000
Cash a/c		1000
(NSF Cheque returned)