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Alykhan Industries provided the following information for the month of February.

ID: 2493277 • Letter: A

Question

Alykhan Industries provided the following information for the month of February. 1.Balance per bank on February 28-$31,080 2.Balance per books on February 28-$32,210 3.Total outstanding checks at February 28-$2,100 4.Debit memoranda: a.NSF check from Sanderson, Inc.-$450 b.Printing company checks-$20 c.Electronic payment to bank for a loan-$2,220. Of this amount, $90 is interest. 5.Credit memorandum: EFT from customer for $1,450 6.A check written this month to City Utilities and cleared the bank at the correct amount of $1,790, but was recorded at $1,870. 7.The bank charged a $270 check of ABC Company against Alykhan Industries' account. 8.Deposit in transit on February 28-$1,800 Instructions A.Prepare a bank reconciliation in proper format. B.Record the necessary journal entries for the month of February for Alykhan Industries.

Explanation / Answer

Balance as per bank

31,080

Less: Outstanding checks

-2,100

Add: Error                            270

Deposit in transit             1,800

2,070

Adjusted balance

31,050

Balance as per books

32,210

Less: NSF                         450

Printing charges               20

Loan paid                       2,220

-2,690

Add: error                             80

Cash from customer     1,450           

1,530

Adjusted balance

31,050

Journal entries

Accounts

Debit

Credit

Account receivable

450

To cash

450

Miscellaneous expense

20

To Cash

20

Bank loan

2,200

Interest expense

   20

To Cash

2,220

Cash

80

To Utilities expense

80

Cash

1,450

To account receivable

1,450

Balance as per bank

31,080

Less: Outstanding checks

-2,100

Add: Error                            270

Deposit in transit             1,800

2,070

Adjusted balance

31,050

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