Santana Rey receives the March bank statement for Business Solutions on April 11

Question

Santana Rey receives the March bank statement for Business Solutions on April 11, 2016. The March 31 bank statement shows an ending cash balance of $66,666. A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following.

S. Rey notices that the bank erroneously cleared a $470 check against her account in March that she did not issue. The check documentation included with the bank statement shows that this check was actually issued by a company named Business Systems.

On March 25, the bank issued a $48 debit memorandum for the safety deposit box that Business Solutions agreed to rent from the bank beginning March 25.

On March 26, the bank issued a $109 debit memorandum for printed checks that Business Solutions ordered from the bank.

On March 31, the bank issued a credit memorandum for $41 interest earned on Business Solutions's checking account for the month of March.

S. Rey notices that the check she issued for $127 on March 31, 2016, has not yet cleared the bank.

S. Rey verifies that all deposits made in March do appear on the March bank statement.

The general ledger Cash account, No. 101, shows an ending cash balance per books of $67,125 as of March 31 (prior to any reconciliation).

Prepare a bank reconciliation for Business Solutions for the month ended March 31, 2016.

Prepare any necessary adjusting entries. Use Miscellaneous Expenses, No. 677, for any bank charges. Use Interest Revenue, No. 404, for any interest earned on the checking account for the month of March. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

Santana Rey receives the March bank statement for Business Solutions on April 11, 2016. The March 31 bank statement shows an ending cash balance of $66,666. A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following.

Explanation / Answer

Bank Reconciliation Statement of Business Solutions for the month ended 31st March 2016 BUSINESS SOLUTIONS BANK RECONCILIATION 31-Mar-16 Bank Statement Balance as on 31st March 2016 66666 Adjustment No Book Balance as on 31st March 2016 67125 Add: Add: a) Business system Check cleared erroneously 470 d) Credit memo for Bank Intrest 41 b) Mar'25 Bank Debit memo for safety Deposit Box 48 e) Cheques Issued But Not Cleard 127 c) Mar'26 Bank Debit memo for                          Printed Checks 109 Less: Less: d) Credit memo for Bank Intrest 41 a) Business system Check cleared erroneously 470 e) Cheques Deposit But Not Cleard 127 b) Mar'25 Bank Debit memo for safety Deposit Box 48 c) Mar'26 Bank Debit memo for                          Printed Checks 109 Adjusted Bank balance 67125 Adjusted book Balance 66666 Journal entries in the books of Business Solution Adjustment No Date General Journal Debit Credit A) No Journal Entry Required B) Mar 25,2016 Bank Charges - Dr 48     To Cash 48 (Being Bank charges for safety deposit box) C) Mar 26,2016 Bank Charges - Dr 109     To Cash 109 (Being Bank charges for Printed Checks) D) Mar 31,2016 Cash - Dr 41     To Bank Interest Credited 41 (Being Bank interest credited for the year) e) No Journal Entry Required f) No Journal Entry Required

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