Company\'s bank statement for the month of September showed a balance per The co

Question

Company's bank statement for the month of September showed a balance per The company's Cash account in the general ledger had a balance of $5,459 Milner Boa bank of $7,000. at September 30. Other information is as follows: Cash receipts for September 30 recorded on the company's books were $5,200 but this amount does not appear on the bank statement. (2) The bank statement shows a debit memorandum for $40 for check printing charges. (3) Check No. 119 payable to Kohl Company was recorded in the cash payments journal and cleared the bank for $248. A review of the accounts payable subsidiary ledger shows a $36 credit balance in the account of Kohl Company and that the payment to them should have been for $284 (4) The total amount of checks still outstanding at September 30 amounted to $6,000. Check No. 138 was correctly written and paid by the bank for $409. The cash payment journal reflects an entry for Check No. 138 as a debit to Accounts Payable and a credit (5) to Cash in Bank for $490. (6) The bank returned an NSF check from a customer for $560 (7) The bank included a credit memorandum for $1,260 which represents collection of a customer's note by the bank for the company; principal amount of the note was $1,200 and interest was $60. Interest has not been accrued. Instructions (a) Prepare a bank reconciliation for Milner Boat Company at September 30. (b) Prepare any adjusting entries necessary as a result of the bank reconciliation.

Explanation / Answer

Answer 1. MILNER BOAT COMPANY Bank Recocilation Statement September 30 Bank's Cash Balance Company's Cash Balance Per Bank Statement            7,000.00 Per General Ledger         5,459.00 Add: Add: Deposit in Transit            5,200.00 Error in Recording Check No. 138 ($490 - $409)                   81.00 Collection of Note & Interest             1,260.00         1,341.00          12,200.00         6,800.00 Less: Less: Outstanding Checks          (6,000.00) Bank Charges - Check Printing Charges                (40.00) NSF Check              (560.00)          (600.00) Bank Balance after Reconcilation            6,200.00 Company Balance per Reconcilation         6,200.00 Answer 2. Journal Entry Date Particulars Dr. Amt.   Cr. Amt. 30-Sep Cash                                                                       1,260.00    Notes Receivables    1,200.00    Interest Revenue          60.00 (To record collection of Note receivable by bank) 30-Sep Accounts Receivable          560.00    Cash       560.00 (To record NSF check) 30-Sep Cash                                                                             81.00     Accounts Payable          81.00 (To correct an error in recording Check no 138) 31-Dec Bank Charges / Misc. Expense            40.00    Cash          40.00 (To record the bank charges) No entry is Recorded for 1 Deposit in Transit 2 Outstanding Checks 3 Bank errors

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