The bank statement for the checking account of Management Systems Inc. (MSI) sho

Question

The bank statement for the checking account of Management Systems Inc. (MSI) showed a December 31, 2018, balance of $16,135.87. Information that might be useful in preparing a bank reconciliation is as follows: a. Outstanding checks were $1,472.50. b. The December 31, 2018, cash receipts of $650 were not deposited in the bank until January 2, 2019. c. One check written in payment of rent for $261 was correctly recorded by the bank but was recorded by MSI as a $274 disbursement d. In accordance with prior authorization, the bank withdrew $600 directly from the checking account as payment on a mortgage note payable. The interest portion of that payment was $425. MSI has made no entry to record the automatic payment e. Bank service charges of $29 were listed on the bank statement. f. A deposit of $950 was recorded by the bank on December 13, but it did not belong to MSI. The deposit should have been made to the checking account of MIS, Inc. g. The bank statement included a charge of $50 for an NSF check. The check was retumed with the bank statement and the company will seek payment from the customer. h. MSI maintains a $240 petty cash fund that was appropriately reimbursed at the end of December. i. According to instructions from MSI on December 30, the bank withdrew $17,500 from the account and purchased U.S. Treasury bills for MSI. MSI recorded the transaction in its books on December 31 when it received notice from the bank. Half of the Treasury bills mature in two months and the other half in six months. Required 2. Prepare any necessary adjusting journal entries indicated. 1 Prepare a bank reconcilaion for thne MSI checking account at December 31,2018. You vill have to compute the balance per books. h and cash equivalents in the current asset section of the December 31, 2018, balance sheet? 3. What amount would MSI report as cas

Explanation / Answer

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MSI Bank reconciliation statement for the month of Dec.31, 2018 Balance as per bank statement 16135.87 Add: b Deposit in transit 650.00 d Payment for mortgage note 600.00 e Bank service charge 29.00 g NSF check 50.00 Total Additions 1329.00 Less: a Outstanding checks 1472.50 c Wrong entry in r/o rental check 13.00 f Deposit not relating to by MSI 950.00 Total Deductions 2435.50 Balance as per books 15029.37

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