Fred White Company operates four bowling alleys. The business just received the

ID: 2414930 • Letter: F

Question

Fred

White Company operates four bowling alleys. The business just received the October 31, 2016, bank statement from City National Bank, and the statement shows an ending balance of $885. Listed on the statement are an EFT rent collection of $410, a service charge of $10, NSF checks totaling $65 and a $30 charge for printed checks. In reviewing his cash records, the business identified outstanding checks totaling $470 and a deposit in transit of $1,785. During October the business recorded a $270 check by debiting Salaries Expense and crediting Cash for $270.The business's Cash account shows an October 31 balance of $2,138.

Requirements

1. Prepare the bank reconciliation at October 31

2. Journalize any transactions required from the bank reconciliation.

Explanation / Answer

Bank book:

Closing balance of bank 885

EFT rent collection 410

Service charges 10

NSF checks totaling 65 and 30 charged for printed checks

Cash book:

O/S checks 470

Deposit in transit 1785

Salary expense 270

Crediting cash 270

Closing cash balance 2138

Bank Reconciliation Statement:

Balance as per Pass Book

885

Add:

NSF checks and printing charges

Service charges

EFT rent collection by bank but not recorded in cash book

410

Crediting cash

270

Less:

Outstanding Checks

470

Deposit in transit

1,785