The bank portion of the bank reconciliation for Rintala Company at November 30,
ID: 2450700 • Letter: T
Question
The bank portion of the bank reconciliation for Rintala Company at November 30, 2014, was as follows.
The adjusted cash balance per bank agreed with the cash balance per books at November 30.
The December bank statement showed the following checks...
Deposits...
The cash records per books for December showed the following.
Cash Payments Journal
=$14,830.81
Cash Receipts Journal
The bank statement contained two memoranda:
(1) A credit of $3,826.18 for the collection of a $3,681.18 note for Rintala Company plus interest of $160.00 and less a collection fee of $15.00. Rintala Company has not accrued any interest on the note.
(2) A debit of $575.19 for an NSF check written by D. Chagnon, a customer. At December 31, the check had not been redeposited in the bank.
At December 31, the cash balance per books was $12,757.81, and the cash balance per the bank statement was $20,515.70. The bank did not make any errors, but two errors were made by Rintala Company.
(a) Using the four steps in the reconciliation procedure, prepare a bank reconciliation at December 31. (Reconcile the bank balance first and then the book balance.) (b) Prepare the adjusting entries based on the reconciliation. (Hint: The correction of any errors pertaining to recording checks should be made to Accounts Payable. The correction of any errors relating to recording cash receipts should be made to Accounts Receivable.)
Explanation / Answer
a) Bank Reconciliation Statement as on December 31 Cash Balance as per Bank 20515.70 Less : outstanding checks of November 3470 720.10 3474 1052.39 1772.49 less : outstanding checks of December 3478 621.30 3481 807.40 3484 795.61 3486 1889.50 4113.81 Add : cheques in transit 31-Dec 1190.40 1190.40 Adjusted cash balance per Bank 15819.80 Add : excess deposit recorded ( 2954 -2945) 20-Dec 9.00 check wrongly entered (530.8 - 350.8) 3485 180.00 189.00 Less : Interest credited 160.00 160.00 Add : Bank charges 15.00 15.00 Add : check returned 575.19 575.19 Less : collection of credit note 3681.18 3681.18 Cash Balance per books 12757.81 b) Adjusting Entries Accounts Receivable Dr 9 Cash Cr 9 ( To record rectification of cash receipts 2954 - 2945) Accounts Payable Dr 180 Cash Cr 180 ( To record rectification of check 3485 issued 530.8 -350.8) Cash Dr 3826.18 Bank Charges Dr 15.00 Interest Income Cr 160.00 Accounts Receivable Cr 3681.18 ( To record collection of note by bank with interest and bank charges) Accounts Receivable Dr 575.19 Cash Cr 575.19 ( To record check returned by the customer)
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