Lyleen Boat Company\'s bank statement for the month of September showed a balanc
ID: 2457469 • Letter: L
Question
Lyleen Boat Company's bank statement for the month of September showed a balance per bank of $7,000. The company's Cash account in the general ledger had a balance of $5,459 at September 30. Other information is as follows: Cash receipts for September 30 recorded on the company's books were $5,700 but this amount does not appear on the bank statement. The bank statement shows a debit memorandum for $40 for check printing charges. Check No. 119 payable to Mann Company was recorded in the cash payments journal and cleared the bank for $248. A review of the accounts payable subsidiary ledger shows a $36 credit balance in the account of Mann Company and that the payment to them should have been for $284. The total amount of checks still outstanding at September 30 amounted to $5,000. Check No. 138 was correctly written and paid by the bank for $409. The cash payment journal reflects an entry for Check No. 138 as a debit to Accounts Payable and a credit to Cash in Bank for $490. The bank returned an NSF check from a customer for $360. The bank included a credit memorandum for $2,560 which represents collection of a customer's note by the bank for the company; principal amount of the note was $2,500 and interest was $60. Interest has not been accrued. Prepare a bank reconciliation for Lyleen Boat Company at September 30. (List items that increase cash balance first.) Prepare any adjusting entries necessary as a result of the bank reconciliation.Explanation / Answer
SOLUTION :
CASH BALANCE PER BANK
7,000
ADD:
(1) DEPOSIT IN TRANSIT
5,700
12,700
LESS:
(4) OUTSTANDING CHECKS
5,000
ADJUSTED CASH BALANCE PER BOOKS
7,700
CASH BALANCE PER BOOKS
5,459
ADD:
(5) ACCOUNTS PAYABLE ERROR
81
(7) COLLECT NOTE AND INTEREST (2500+60)
2,560
8,100
LESS:
(2) CHECK PRINTING
40
(6) NSF CHECK
360
ADJUSTED CASH BALANCE PER BOOKS
7,700
DATE
ACOOUNT TITLE
DEBIT
CREDIT
SEP 30.
CASH
81
TO ACCOUNT PAYABLE
81
TO CORRECT ERROR IN RECORDING CHECK NO. 138)
SEP 30.
CASH
2560
NOTE RECEIVABLE
2500
INTEREST INCOME
60
TO RECORD COLLECTION OF NOTE RECEIVABLE AND INTEREST BY THE BANK
SEP 30.
MICELANEOUS EXPENSE
40
CASH
40
TO RECORD CHECK PRINTING CHARGES
SEP 30.
ACCOUNT RECEIVABLE
360
CASH
360
TO RECORD NSF CHECK
CASH BALANCE PER BANK
7,000
ADD:
(1) DEPOSIT IN TRANSIT
5,700
12,700
LESS:
(4) OUTSTANDING CHECKS
5,000
ADJUSTED CASH BALANCE PER BOOKS
7,700
CASH BALANCE PER BOOKS
5,459
ADD:
(5) ACCOUNTS PAYABLE ERROR
81
(7) COLLECT NOTE AND INTEREST (2500+60)
2,560
8,100
LESS:
(2) CHECK PRINTING
40
(6) NSF CHECK
360
ADJUSTED CASH BALANCE PER BOOKS
7,700
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