The following information pertains to Leeper Company. 1.Cash balance per bank, O

Question

The following information pertains to Leeper Company.

1.Cash balance per bank, October 31, $7,328. October bank service charge not recorded by the depositor $40.

2.Cash balance per books, October 31 $7,280.

3. Deposits in transit, October 31, $1,700

4.Note for $1,000 collected for Leeper in October by the bank, plus interest $36 less fee $20. The collection has not been recorded by Leeper, and no interest has been accrued.

5.Outstanding checks, October 31, $772.

Required:

A. Prepare a bank reconciliation at October 31, 2012

B. Which items above require a journal entry in the company’s accounting records?

Explanation / Answer

Bank reconciliation Statement Particulars Amount Cash balance per books               7,280.00 Bank service charge                  (40.00) Deposits not recorderd in Bank Statement            (1,700.00) Collection by Bank incl Intt (1000+36)               1,036.00 Bank Fees for collection                  (20.00) Outstanding cheques                  772.00 Cash balance per bank               7,328.00 Particulars Dr Amt Cr Amt Bank Charge                       40.00 To Bank              40.00 Bank A/C Dr               1,016.00 Bank fees Dr                     20.00 To Note receivable        1,000.00 To Interest Revenue              36.00

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