Bourne Incorporated reports a cash balance at the end of the month of $2,345. A
ID: 2414992 • Letter: B
Question
Bourne Incorporated reports a cash balance at the end of the month of $2,345. A comparison of the company's cash records with the monthly bank statement reveals several additional cash transactions: bank service fees ($74), an NSF check from a customer ($240), a customer’s note receivable collected by the bank ($1,200), and interest earned ($24).
Required:
Record the necessary entries to adjust the balance of cash.
· Record the entries that increase cash.
· Record the entries that decrease cash.
Bourne Incorporated reports a cash balance at the end of the month of $2,345. A comparison of the company's cash records with the monthly bank statement reveals several additional cash transactions: bank service fees ($74), an NSF check from a customer ($240), a customer’s note receivable collected by the bank ($1,200), and interest earned ($24).
Explanation / Answer
Answer :- Journal entries
Bank service fees A/c Dr.
To Cash A/c
74
74
Cash A/c Dr.
To Note receivable A/c
1200
1200
Accounts receivable A/c Dr.
To Cash A/c
240
240
Cash A/c Dr.
To Interest earned A/c
24
24
Reconciled cash balance = 2345 - 74 + 1200 - 240 + 24
= $ 3255.
Conclusion :- Reconciled cash balance = $ 3255.
General journal Debit ($) Credit ($)Bank service fees A/c Dr.
To Cash A/c
74
74
Cash A/c Dr.
To Note receivable A/c
1200
1200
Accounts receivable A/c Dr.
To Cash A/c
240
240
Cash A/c Dr.
To Interest earned A/c
24
24
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