Question

Sky Company is unable to reconcile the bank balance at January 31. Sky’s reconciliation is as follows.

Cash balance per bank		$5,300
Add: NSF check		1,570
Less: Bank service charge		35
Adjusted balance per bank		$6,835
Cash balance per books		$5,705
Less: Deposits in transit		750
Add: Outstanding checks		1,950
Adjusted balance per books		$6,905

Partially correct answer iconYour answer is partially correct.

Prepare a correct bank reconciliation. (List items that increase cash balance first.)

SKY COMPANY Bank Reconciliation choose the accounting period                                                                      At January 31For the Month Ended January 31For the Year Ended January 31
select an opening name for section one                                                                      Cash balance per bank statementAdjusted cash balance per bankDeposits in transitOutstanding checksNSF checkBank service charge					$enter a dollar amount
select between addition and deduction                                                                      AddLess:	select a reconciling item                                                                      Cash balance per bank statementAdjusted cash balance per bankDeposits in transitOutstanding checksNSF checkBank service charge				enter a dollar amount
					enter a subtotal for two previous amounts
select between addition and deduction                                                                      AddLess:	select a reconciling item                                                                      Cash balance per bank statementAdjusted cash balance per bankDeposits in transitOutstanding checksNSF checkBank service charge				enter a dollar amount
select a closing name for section one                                                                      Cash balance per bank statementAdjusted cash balance per bankDeposits in transitOutstanding checksNSF checkBank service charge					$enter a total amount for section one
select an opening name for section two                                                                      Cash balance per booksAdjusted cash balance per booksDeposits in transitOutstanding checksNSF checkBank service charge					$enter a dollar amount
select between addition and deduction                                                                      AddLess:	select a reconciling item                                                                      Cash balance per booksAdjusted cash balance per booksDeposits in transitOutstanding checksNSF checkBank service charge		$enter a dollar amount
	select a reconciling item                                                                      Cash balance per booksAdjusted cash balance per booksDeposits in transitOutstanding checksNSF checkBank service charge		enter a dollar amount
					enter a subtotal for two previous amounts
select a closing name for section two                                                                      Cash balance per booksAdjusted cash balance per booksDeposits in transitOutstanding checksNSF checkBank service charge					$enter a total amount for section two

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List of Accounts

  

  

Partially correct answer iconYour answer is partially correct.

Journalize the entries required by the reconciliation. Hint: For Bank Service Charge use Miscellaneous Expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
1.	enter an account title to record NSF check	enter a debit amount	enter a credit amount
	enter an account title to record NSF check	enter a debit amount	enter a credit amount
	(To record NSF check.)
2.	enter an account title to record bank service charge	enter a debit amount	enter a credit amount
	enter an account title to record bank service charge	enter a debit amount	enter a credit amount
	(To record bank service charge.)

Answer 1

a
SKY COMPANY
Bank Reconciliation
At January 31
Cash balance per bank statement		5300
Add: Deposits in transit		750
		6050
Less: Outstanding checks		1950
Adjusted cash balance per bank		4100
Cash balance per books		5705
Less:
NSF check	1570
Bank service charge	35
		1605
Adjusted cash balance per books		4100

b
No	Account Titles and explanation	Debit	Credit
1	Accounts Receivable	1570
	Cash		1570
	(To record NSF check)
2	Miscellaneous Expense	35
	Cash		35
	(To record bank service charge)