The Brown Company bank statement for September 30, 2019 showed a balance of $1,6

Question

The Brown Company bank statement for September 30, 2019 showed a balance of

$1,681.50. The company's cash account showed a $1,305.20 debit balance. The

following information was also available.

(a) A customer's cheque for $90 marked NSF was returned to Brown Company by the

bank. The bank charged the company's account a $10 processing fee.

(b) The September 30 cash receipts, $1,250, were placed in the bank's night

depository after banking hours on that date and this amount did not appear on the

bank statement.

(c) A $15.10 debit memorandum for cheques printed by the bank was included with the

cancelled cheques.

(d) Outstanding cheques amounted to $1,141.40.

(e) A customer's note for $920 was collected by the bank. A collection fee of $20 was

deducted by the bank.

(f) Included with the cancelled cheques was a cheque for $300, drawn on another

company, The Browne Bros. The Brown Company does not do business with The

Browne Bros

Required:

1. Prepare a bank reconciliation in good form at September 30, 2019.

2. Prepare the necessary journal entries to bring the General Ledger Cash account

into agreement with the adjusted balance on the bank reconciliation.

Explanation / Answer

Solution 1:

Solution 2:

Brown Company Bank Reconciliation - September 30, 2019 Bank's Cash balance Company's cash balance Particulars Amount Particulars Amount Ending balance as per Bank Statements $1,681.50 Ending Balance as per cash books $1,305.20 Additions: Additions: Outstanding cash receipt $1,250.00 Notes received $920.00 Incorrect recording of cheque $300.00 Deductions: Deductions: Outstanding Checks $1,141.40 NSF Cheque $90.00 Printed check charges $15.10 Collection Fee of Note $20.00 Processing Fee $10.00 Up to date cash balance as per bank $2,090.10 Up to date cash balance as per books $2,090.10

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