Oscar’s Red Carpet Store maintains a checking account with Academy Bank. Oscar’s

Question

Oscar’s Red Carpet Store maintains a checking account with Academy Bank. Oscar’s sells carpet each day but makes bank deposits only once per week. The following provides information from the company’s cash ledger for the month ending February 28, 2018.
  

Information from February's bank statement and company records reveals the following additional information:
  

a. The ending cash balance recorded in the bank statement is $8,230.
b. Cash receipts of $600 from 2/26-2/28 are outstanding.
c. Checks 325 and 327 are outstanding.
d. The deposit on 2/11 includes a customer's check for $200 that did not clear the bank (NSF check).
e. Check 323 was written for $2,500 for advertising in February. The bank properly recorded the check for this amount.
f. An automatic withdrawal for Oscar's February rent was made on February 4 for $1,300.
g. Oscar's checking account earns interest based on the average daily balance. The amount of interest earned for February is $100.
h. In January, one of Oscar's suppliers, Titanic Fabrics, borrowed $4,000 from Oscar. On February 24, Titanic paid $4,150 ($4,000 borrowed amount plus $150 interest) directly to Academy Bank in payment for January's borrowing.
i. Academy Bank charged service fees of $120 to Oscar’s for the month.

Required:

1. Prepare a bank reconciliation for Oscar's checking account on February 28, 2018. (Amounts to be deducted should be indicated with a minus sign.)

2. Record the necessary cash adjustments. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Total entries to the same account together when entering in the journal entry carousel.)
  

Date Amount No. Date Amount   Deposits:      2/4 $ 1,700     Checks: 321      2/2 $ 3,700          2/11 1,300     322      2/8 400          2/18 2,200     323      2/12 1,500          2/25 3,100     324      2/19 1,200       Cash receipts:   2/26-2/28 600     325      2/27 200     326      2/28 700     $ 8,900     327      2/28 900       Balance on February 1 $   5,800     $8,600       Receipts 8,900       Disbursements (8,600)      Balance on February 28 $   6,100    

Explanation / Answer

1 OSCAR'S RED CARPET STORE Bank Reconciliation 28-Feb-18 Bank's Cash Balance Company's Cash Balance Per bank statement 8230 Per general ledger 6100 Deposits outstanding 600 NSF check -200 Checks outstanding -1100 Company error -1000 EFT for rent -1300 Interest on account 100 Note collected 4000 Interest on note 150 Service fees -120 Bank balance per reconciliation 7730 Company balance per reconciliation 7730 2 Cash 4250      Notes Receivable 4000      Interest Revenue 250 Accounts Receivable 200 Advertising Expense 1000 Rent Expense 1300 Service Fee Expense 120       Cash 2620

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