Roper Electronics received its bank statement for the month of August with an en
ID: 2483520 • Letter: R
Question
Roper Electronics received its bank statement for the month of August with an ending balance of $11,740.00. Roper determined that check #613 for $155.00 and check #601 for $420.00 were both outstanding. Also, a $6,900.00 deposit for August 30th was in transit as of the end of the month. Northern Regional Bank also collected a $5,000.00 notes receivable on August 1st that was issued March 1st at 12% annual interest. No interest revenue has been accrued on this note and Northern Regional Bank charged a $35.00 fee for the collection service. The bank statement reveals a bank service charge of $20.00. A customer check for $68.00 was returned with the bank statement marked "NSF". The ending balance of the Roper cash account is $12,938.00.
1) Complete a bank reconciliation and prepare any necessary journal entries for the reconciliation.
2) Record the entry to increase cash first. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".
Explanation / Answer
Bank Reconciliation statement $ Bank Balance as per Bank Book 12,938 Less:- Cheque Depoisted but not cleared by Bank -6,900 Add:- Notes Receivable Collected by bank 5,000 Less:- Bank Collection Charges Debited by bank -35 Less:- Bank Service Charges Debited by bank -20 Less:- Cheque returned by bank -68 Less:- Interest given by bank not debited for 5 months 250 (5000 X 12% X 5/12) Add:- Cheque Issued but not presented for payment 155 Add:- Cheque Issued but not presented for payment 420 Balance as per bank statement 11,740 Journal Entry Debit Credit Bank A/c 5250 To Interest on Notes Receivable 250 To Notes Receivable 5000 Bank Charges 55 To Bank 55 (20 +35) Account receivable 68 To Bank 68 (being cheque returned of a customer)
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