Bank Reconciliation On May 31, the Cash in Bank account of Wallace Company, a so
ID: 2434732 • Letter: B
Question
Bank Reconciliation On May 31, the Cash in Bank account of Wallace Company, a sole proprietership, had a balance of $6,734.75
On that date, the bank statement indicated a balance of $8,726.85.
A comparison of returned checks and bank advices revealed the following:
Deposits in transit May 31 totaled $2,979.96
Outstanding checks May 31 totaled $3,397.08
The bank added to the account $30.58 of interest income earned by Wallace during May.
The bank collected a $2,640 note receivable for Wallace and charged a $22 collection fee. Both items appear on the bank statement.
Bank service charges in addition to the collection fee, not yet recorded were $22.00.
Included with the returned checks is a memo indicating that L. Ryder's check for $754.60 had been returned NSF.
Ryder, a customer, had sent the check to pay an account of $770.00 less a discount of 2%
Wallace Company incorrectly recorded the payment of an account payable as $759.00 the check was for $1,056.00.
Required
a. Prepare a bank reconciliation for Wallace Company at May 31.
b. Prepare the journal entry (or entries) necessary to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation.
a.
b.
Bank Reconciliation
May 31 AnswerDeposits not credited by bankEnding balance from bank statementOutstanding checksCollection of noteService chargeReconciled cash balance $Answer Balance from general ledger $Answer Add: AnswerDeposits not credited by bankEnding balance from bank statementOutstanding checksCollection of noteService chargeReconciled cash balance Answer Add: AnswerDeposits not credited by bankEnding balance from bank statementOutstanding checksCollection of noteService chargeReconciled cash balance Answer Less: Collection Fee Answer Answer Add: Interest Income Answer Subtotal Answer Subtotal Answer Less: AnswerDeposits not credited by bankEnding balance from bank statementOutstanding checksCollection of noteService chargeReconciled cash balance Answer Less: AnswerDeposits not credited by bankEnding balance from bank statementOutstanding checksCollection of noteService chargeReconciled cash balance Answer Less: NSF Check Answer Less: Check for $Answer recorded as $Answer Answer Answer AnswerDeposits not credited by bankEnding balance from bank statementOutstanding checksCollection of noteService chargeReconciled cash balance $Answer AnswerDeposits not credited by bankEnding balance from bank statementOutstanding checksCollection of noteService chargeReconciled cash balance $Answer
Explanation / Answer
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BANK RECONCILATION Balance as per bank 8,726.85. Balance as per book 6734.75 Add: Add: Deposits in transit 2979.96 Interest income 30.58 Note collected net of bank charges [2640-22] 2618 less:outstanding checks (3397.08) less:Bank service charges (22) NSF returned (754.6) Error in recording [1056-759] (297) Adjusted bank balance 8309.73 8309.73Related Questions
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