The cash account for Santiago Co. on May 31, 2011, indicated a balance of $15,51

Question

The cash account for Santiago Co. on May 31, 2011, indicated a balance of $15,515.00. The March bank statement indicated an ending balance of $20,245.00. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: a. Checks outstanding totaled $4,820.00 b. A deposit of $3,796.00 had been made too late to appear on the bank statement. c. A check for $1,233.00 returned with the statement had been incorrectly recorded as $233.00. The check was originally issued to pay on account. d. The bank collected $5,541.00 on a note left for collection. e. Bank service charges for May amounted to $45.00. f. A check for $790.00 was returned by the bank because of insufficient funds. Prepare a bank reconciliation as of May 31, 2011. Journalize the necessary entries

Explanation / Answer

Balance per bank $20,245 (a) deduct 4,820 (b) add 3,796 Adjusted balance 19,221 Balance per book $15,515 (c) deduct 1,000 (d) add 5,541 (e) deduct 45 (f) deduct 790 Adjusted Balance 19,221 Entries (c) Accounts payable 1000 Dr Cash 1000 Cr. (d) Cash 5541 Dr. Notes Receivable 5541 Cr. (e) Bank Service Charge 45 Dr. Cash 45 Cr. (f) Accounts Receivable 790 Dr. Cash 790 Cr.

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