What must be answered: QUESTION: Madison Company\'s cash ledger reports the foll

Question

What must be answered:

QUESTION:

Madison Company's cash ledger reports the following for the month ending March 31.

Information from March's bank statement and company records reveals the following additional information.

The ending cash balance recorded in the bank statement is $7,223.

The deposit on 3/11 includes a customer's check for $420 that did not clear the bank (NSF check).

Check 543 was written for $3,400 for office supplies in March. The bank properly recorded the check for this amount.

An automatic withdrawal for March rent was made on March 4 for $1,500.

Madison's checking account earns interest based on the average daily balance. The amount of interest earned for March is $53.

Last year, one of Madison's top executives borrowed $4,100 from Madison. On March 24, the executive paid $4,360 ($4,100 borrowed amount plus $260 interest) directly to the bank in payment for the borrowing.

The bank charged the following service fees: $31 for NSF check, $17 for automatic withdrawal for rent payment, and $22 for collection of the loan amount from the executive.

Information from March's bank statement and company records reveals the following additional information.

1. Prepare a bank reconciliation for March 31. (Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.) MADISON COMPANY Bank Reconciliation March 31 Bank's Cash Balance Company's Cash Balance Before reconciliation Before reconciliation $ 5900 Click to select) Click to select) Click to select) Click to select) Click to select) Click to select) Click to select) Click to select) Click to select) After reconciliation After reconciliation 2. Record the necessary cash adjustments. (Omit the "$" sign in your response.) General Journal Debit Credit Click to select) Click to select) Click to select) Click to select) Click to select) Click to select) Click to select) Click to select)

Explanation / Answer

Madisons

Bank Reconciliation

March 31

Balance as per Bank 7223 + Add deposit in transit 420 Interest on account 53 return of borrowed amount on 24March 4100 Interest on borrowed amount 260 NSF check service fees 31 Withdrawal of rent payment 17 collection of loan 22 12126 (-) less outstanding Checks check 545 issued on 3/27 700 Check 547 issued on 3/30 1300 cash receipts outstanding 2500 Check 543 was written 3400 Rent withdwawl March 4 1500 9400 Adjusted Bank Balance 2726

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