Jarvis Incorporated is preparing a bank reconciliation for the month of January

Question

Jarvis Incorporated is preparing a bank reconciliation for the month of January 2016. The following information is collected in preparing the reconciliation: The cash balance per the general ledger (g/l) is $3.597The cash balance per the January 2016 bank statement is $5,975 Deposits in transit for January were S1,600 I here were 5 outstanding checks that had not been cashed by the end of January; they were the following: Jarvis tenants pay their rent electronically. The bank collected an EFT (electronic funds transfer) for rent revenue in the amount of $905.The bank collected a note receivable in the amount of $2.115, which includes interest of$1 15.Interest revenue earned on the bank account was $30 for the month Bank service charges amounted to $15 for the month An NSF (non-sufficient funds) check was received from L Ross for $52 There was an EFT payment for insurance expense of $360 Required: Prepare the bank reconciliation for Jarvis Incorporated for January 2016 Prepare the necessary journal entries to account for any reconciling items resulting from the bank reconciliation you prepared.

Explanation / Answer

Jarvis Incorporated All Amounts in $ 1. Bank Reconciliation for the month of January 2016 Balance as per Cash Book in General Ledger 3597 Less : Cheques Deposited not cleared -1600 1997 Add : Cheques issued not presented Ch.No. Amount 737 285 738 320 739 85 740 205 741 460 1355 Add : Rent Revenue not accounted by Jarvis credited electronically in bank 905 Add : Note receivable collected by bank including interest 2115 Add : Interest on Bank Balance 30 Less : Bank Service Charges -15 Less : Cheque deposited dishonoured -52 Less : EFT for Insurance Expense -360 3978 Balance per Bank Statement 5975 2. Journal Entries in the books of Jarvis Incorporated a. Bank A/c 905 To Rent Revenue A/c 905 b. Bank A/c 2115 To Note Receivable A/c 2000 To Interest on Note A/c 115 c. Bank A/c 30 To Interest on Bank Account A/c 30 d. Bank Charges A/c 15 To Bank A/c 15 e. L.Ross A/c 52 To Bank A/c 52 f. Insurance Expense A/c 360 To Bank A/c 360

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