Western Flyers received its bank statement for the month of July with an ending

Question

Western Flyers received its bank statement for the month of July with an ending balance of $11,065.00. Western Flyers determined that check #598 for $125.00 and check #601 for $375.00 were both outstanding. Also, a $7,500.00 deposit for July 30th was in transit as of the end of the month. Big Bucks Bank also collected a $5,000.00 notes receivable on July 1st that was issued January 1st at 12% annual interest. No interest revenue has been accrued on this note and Big Bucks Bank charged a $15.00 fee for the collection service.The company's morning reports resulted in a bank service charge of $20.00 and a customer check for $75.00 was returned with the statement marked ?NSF?. The ending balance of the Western Flyers cash account is $12,875.00.

Complete a bank/account reconciliation and write any necessary journal entries for the reconciliation.

Explanation / Answer

Answer:

Bank Reconciliation Statement As of July-31 Description Amount in $ Ending Balance as per Bank Statement      11,065.00 Adjustments: Less: Checks not presented for payment          (500.00) Add: Deposit in transit         7,500.00 Less: Note receivable collected by bank (with interest)      (5,300.00) Add: Fee for collection services               15.00 Add: Morning bank statement charges               20.00 Add: Customer check return               75.00 Ending Balance as per Western Flyers cash account      12,875.00

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