The following information is available for Delta Company as of April 30, 2011: a

Question

The following information is available for Delta Company as of April 30, 2011:

a. Cash on the books as of April 30 amounted to $114,175.28. Cash on the bank statement for the same date was $141,717.08.

b. A deposit of $14,249.84, representing cash receipts of April 30, did not appear on the bank statement.

c. Outstanding checks totaled $7,293.64.

d. A check for $2,420.00 returned with the statement was recorded as $2,024.00. The check was for advertising.

e. The bank service charge for April amounted to $26.00.

f. The bank collected $36,400.00 for Delta Company on a note. The face value of the note was $36,000.00.

g. An NSF check for $1,140.00 from a customer, Hasan Ali, was returned with the statement.

h. The bank mistakenly deducted a check for $800.00 that was drawn by Alpha Corporation.

i. The bank reported a credit of $460.00 for interest on the average balance.

1. prepare the necessary journal entries from the bank reconciliation

Explanation / Answer

Bank Reconciliation Statement Amount Amount Balance as per cashbook $ 114,175.28 Less deposit not in bank $ -14,249.84 add outstanding checks $      7,293.64 less check returned for advertising(2420-2024) $        -396.00 wrong entry to be rectified less bank service charge $          -26.00 bank charges debit to cash credit add bank collection $    36,400.00 Cash debit to notereceivable credit less check returned $    -1,140.00 Accounts receivable debit to cash credit Less bank deduction $        -800.00 wrong entry to be rectified add bank interest $          460.00 Cash debit to bank interest credit balance as per bank $ 141,717.08

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