PROBLEM 2-Worth SIXTEEN (16) points books was The April 30. 2017, balance per ba

Question

PROBLEM 2-Worth SIXTEEN (16) points books was The April 30. 2017, balance per bank statement was $6,2 he cash balance per S8,325. O statement contain utstanding checks amounted to $850, and deposits in transit were $2,400. The bank ed an NSF check for $550, and a service charge for 525 Required a) Prepare a bank reconciliation to determine the true cash balance at Apri (Hint: you will need to derive true cash balance from both un unadjusted book balance). l 30 , 2017. adjusted bank balance and b) Prepare any necessary journal entries.

Explanation / Answer

Bank Reconciliation

30-Apr

Bank Statement

Company's Books

Ending Balance as per Bank Statement

$6,200

Ending balance as per cash account

$8,325

Additions:

Less:

Deposit in transit

$2,400

NSF Check

$550

$8,600

Bank charges

$25

($575)

Less: outstanding checks

($850)

Corrected cash balance

$7,750

Corrected bank balance

$7,750

Necessary Journal Entries:

Date

Account Titles and Explanation

Debit

Credit

30-Apr

Accounts Receivable

$550

Cash

$550

(To record NSF check)

30-Apr

Bank Service charges

$25

Cash

$25

(To record bank service charges for the month of April)

Bank Reconciliation

30-Apr

Bank Statement

Company's Books

Ending Balance as per Bank Statement

$6,200

Ending balance as per cash account

$8,325

Additions:

Less:

Deposit in transit

$2,400

NSF Check

$550

$8,600

Bank charges

$25

($575)

Less: outstanding checks

($850)

Corrected cash balance

$7,750

Corrected bank balance

$7,750

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