Question

Santana Rey receives the March bank statement for Business Solutions on April 11, 2018. The March 31 bank statement shows an ending cash balance of $67,366. A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following. S. Rey notices that the bank erroneously cleared a $470 check against her account in March that she did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Business Systems. On March 25, the bank lists a $55 charge for the safety deposit box expense that Business Solutions agreed to rent from the bank beginning March 25. On March 26, the bank lists a $101 charge for printed checks that Business Solutions ordered from the bank. On March 31, the bank lists $32 interest earned on Business Solutions’s checking account for the month of March. S. Rey notices that the check she issued for $131 on March 31, 2018, has not yet cleared the bank. S. Rey verifies that all deposits made in March do appear on the March bank statement. The general ledger Cash account, No. 101, shows an ending cash balance per books of $67,829 as of March 31 (prior to any reconciliation). Required: 1. Prepare a bank reconciliation for Business Solutions for the month ended March 31, 2018. 2. Prepare any necessary adjusting entries. Use Miscellaneous Expenses, for any bank charges. Use Interest Revenue, for any interest earned on the checking account for the month of March. (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			67,366	Book Balance			67,829
Add:				Add:
Error made by bank		470		interest earned		32
			470				32
			67,836				67,861
Deduct:				Deduct:
Checks outstanding		131		Safety deposit box expense		55
			131	printing charges		101
							156
Adjusted bank balance			67,705	Adjusted cash balance			67,705

Adjusting entries
General Jouranl				Debit	Credit
Cash				32
interest revenue					32
Miscellaneous expense				156
cash					156