Bank Reconciliation The bank reconciliation made by Sandler Company, a sole proprietorship, on March 31 showed:
Deposit in transit of $1,320 Outstanding checks no.797 $540 no.804 $1,068 The reconciled cash balance on March 31 was $14,064
The following bank statement is available for April 2012.
Bank Statement TO Sandler Company April 30 Fairbanks, AK FAIRBANKS NATIONAL BANK Date Deposits No. Date Charges Date Balance Apr. 1 $1,320 804 Apr. 2 $1,068 Mar. 31 $14,352 3 2,016 807 3 876 Apr. 1 15,672 7 1,500 808 7 1,368 2 14,604 13 1,224 809 7 1,006 3 15,744 18 1,008 810 16 1,248 7 14,870 23 948 811 13 391 13 15,703 27 1,608 813 27 648 16 14,455 30 1,392 814 23 720 18 14,863 30 IN 72 NSF 18 600 23 15,091 SC 30 48 27 16,051 30 17,467 Item codes EC: Error Correction DM: Debit Memo CM: Credit Memo SC: Service Charge OD: Overdraft RT: Returned Item IN: Interest Earned NSF: Non-sufficient Funds
A list of deposits made and checks written during April is shown below:
Deposits Made Checks Written Apr. 2 $2,016 No. 807 $876 6 1,500 808 1,368 10 1,224 809 1,006 17 1,008 810 1,248 22 948 811 326 24 1,608 812 1,138 29 1,392 813 648 30 1,710 814 720 $11,406 815 446 816 1,050 $8,826
The Cash in Bank account balance on April 30 was $16,644. In reviewing checks returned by the bank, the accountant discovered that check No. 811 written for $391 for delivery expense, was recorded in the cash disbursements journal as $326. The NSF check for $600 was that of customer R. Koppa, deposited in April.
Required
a. Prepare a bank reconciliation for Sandler Company at April 30.
b. Prepare the necessary journal entries to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation.
a.
SANDLER COMPANY
Bank Reconciliation
April 30 AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance $Answer AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance $Answer AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance Answer AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance Answer Answer Answer Less: Outstanding checks (list in numerical order) Less: NSF Check R. Koppa Answer Check no. Amount Answer Answer AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance Answer Answer Answer Error in recording Answer Answer Check No. 811 Answer Answer Answer Answer Answer AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance $Answer AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance $Answer
b.
General Journal Date Description Debit Credit April 30 AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income $Answer $Answer AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income Answer Answer To record interest earned on bank account for April. 30 AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income Answer Answer AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income Answer Answer To reclassify NSF check as an accounts receivable. 30 AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income Answer Answer AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income Answer Answer To record bank service charge. 30 AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income Answer Answer AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income Answer Answer To correct error in recording check 811.
Bank Reconciliation The bank reconciliation made by Sandler Company, a sole proprietorship, on March 31 showed:
Deposit in transit of | $1,320 | |
Outstanding checks | no.797 | $540 |
no.804 | $1,068 | |
The reconciled cash balance on March 31 was | $14,064 |
The following bank statement is available for April 2012.
Bank Statement | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
TO | Sandler Company | April 30 | |||||||||||
Fairbanks, AK | FAIRBANKS NATIONAL BANK | ||||||||||||
Date | Deposits | No. | Date | Charges | Date | Balance | |||||||
Apr. | 1 | $1,320 | 804 | Apr. | 2 | $1,068 | Mar. | 31 | $14,352 | ||||
3 | 2,016 | 807 | 3 | 876 | Apr. | 1 | 15,672 | ||||||
7 | 1,500 | 808 | 7 | 1,368 | 2 | 14,604 | |||||||
13 | 1,224 | 809 | 7 | 1,006 | 3 | 15,744 | |||||||
18 | 1,008 | 810 | 16 | 1,248 | 7 | 14,870 | |||||||
23 | 948 | 811 | 13 | 391 | 13 | 15,703 | |||||||
27 | 1,608 | 813 | 27 | 648 | 16 | 14,455 | |||||||
30 | 1,392 | 814 | 23 | 720 | 18 | 14,863 | |||||||
30 IN | 72 | NSF | 18 | 600 | 23 | 15,091 | |||||||
SC | 30 | 48 | 27 | 16,051 | |||||||||
30 | 17,467 | ||||||||||||
Item codes | EC: Error Correction | DM: Debit Memo | CM: Credit Memo | ||||||||||
SC: Service Charge | OD: Overdraft | RT: Returned Item | |||||||||||
IN: Interest Earned | NSF: Non-sufficient Funds |
A list of deposits made and checks written during April is shown below:
Deposits Made | Checks Written | |||||
---|---|---|---|---|---|---|
Apr. | 2 | $2,016 | No. | 807 | $876 | |
6 | 1,500 | 808 | 1,368 | |||
10 | 1,224 | 809 | 1,006 | |||
17 | 1,008 | 810 | 1,248 | |||
22 | 948 | 811 | 326 | |||
24 | 1,608 | 812 | 1,138 | |||
29 | 1,392 | 813 | 648 | |||
30 | 1,710 | 814 | 720 | |||
$11,406 | 815 | 446 | ||||
816 | 1,050 | |||||
$8,826 |
The Cash in Bank account balance on April 30 was $16,644. In reviewing checks returned by the bank, the accountant discovered that check No. 811 written for $391 for delivery expense, was recorded in the cash disbursements journal as $326. The NSF check for $600 was that of customer R. Koppa, deposited in April.
Required
a. Prepare a bank reconciliation for Sandler Company at April 30.
b. Prepare the necessary journal entries to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation.
a.
SANDLER COMPANY Bank Reconciliation April 30 | ||||||
---|---|---|---|---|---|---|
AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance | $Answer | AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance | $Answer | |||
AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance | Answer | AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance | Answer | |||
Answer | Answer | |||||
Less: Outstanding checks (list in numerical order) | Less: NSF Check R. Koppa | Answer | ||||
Check no. | Amount | |||||
Answer | Answer | AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance | Answer | |||
Answer | Answer | Error in recording | ||||
Answer | Answer | Check No. 811 | Answer | |||
Answer | Answer | Answer | Answer | |||
AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance | $Answer | AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance | $Answer |
b.
General Journal | ||||
---|---|---|---|---|
Date | Description | Debit | Credit | |
April | 30 | AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | $Answer | $Answer |
AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | Answer | Answer | ||
To record interest earned on bank account for April. | ||||
30 | AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | Answer | Answer | |
AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | Answer | Answer | ||
To reclassify NSF check as an accounts receivable. | ||||
30 | AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | Answer | Answer | |
AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | Answer | Answer | ||
To record bank service charge. | ||||
30 | AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | Answer | Answer | |
AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income | Answer | Answer | ||
To correct error in recording check 811. |