Question

McDermott Company's bank statement for September 30 showed an ending cash balance of $1,462. The company's Cash account in its general ledger showed a $1,115 debit balance. The following information was also available as of September 30. • The bank deducted $165 for an NSF check from a customer deposited on September 15. • The September 30 cash receipts, $1,330, were placed in the bank's night depository after banking hours on that date and this amount did not appear on the September 30 bank statement. • A $23 debit memorandum for checks printed by the bank was included with the canceled checks. • Outstanding checks amounted to $1,265. • Included with the bank statement was a credit memo in the amount of $915 for an EFT in payment of a customer’s account. • Included with the canceled checks was a check for $315, drawn on the account of another company.

Required: a. Prepare a bank reconciliation as of September 30.

b. Prepare the journal entries for the items on the company’s bank reconciliation as of September 30. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Bank Reconciliation:

Bank statement balance=1462
Add:
Deposit of sep 30=1330
Total=2792
Deduct:
Outstanding checks=1265
Adjsuted bank balance=1527

Book balance of cash=1115
Add:
payment cusotmer amount=915
Deduct:
Check printing charge=23
NSF check=165+315=480
Total=503
Adjsuted book balance=1527

2)Journal entries:
Sep 30:
Cash(db)915
notes receivable(Cr)915
(to record payment from customer)
Miscellaneous expense(db)23
cash(cr)23
(check printing charge)
Accounts receivable(db) 480
cash(cr) 480
(NSF check)