The bank section of the bank reconciliation for the ROLLING Company at December
ID: 2475977 • Letter: T
Question
The bank section of the bank reconciliation for the ROLLING Company at December 27,2011 was as follows:
ROLLING COMPANY
Bank Reconciliation
December 31, 2009
Cash balance per bank $13,950.70
Add: Deposits in transit 2,348.20
16,298.90
Less: Outstanding checks
Check Number Check Amount
5551 $2,175.50
5571 844.50
5572 1,521.75
5574 995.00
5575 670.50 6,207.25
Adjusted cash balance per bank $10,091.65
The adjusted cash balance per bank agreed with the cash balance per books at December 30.
The January bank statement showed the following checks and deposits.
Check Date Number Amount
1-1 5551 $2,175.50
1-2 5571 844.50
1-4 5572 1,521.75
1-8 5576 1,300.00
1-10 5577 2,130.00
1-15 5579 3,233.00
1-27 5580 600.00
1-28 5581 475.50
1-29 5583 1,140.00
1-30 5586 870.30
1-31 5587 1,640.70
Total $15,931.25
Date Deposit Amount
1-1 $2,348.20
1-4 1,998.20
1-8 2,135.10
1-16 2,562.80
1-24 3,478.00
1-26 2,567.30
1-29 2,886.20
1-30 1,025.00
Total $19,000.80
The cash records per books for January showed the following:
Cash Payments Journal Cash Receipts Journal
Date Number Amount Date Number Amount Date Amount
1-1 5576 $1,300.00 1-20 5583 $ 1,140.00 1-3 $1,998.20
1-2 5577 2,130.00 1-22 5584 983.00 1-7 2,135.10
1-2 5578 579.10 1-23 5585 1,389.50 1-15 2,562.80
1-4 5579 3,233.00 1-24 5586 780.30 1-23 3,487.00
1-8 5580 600.00 1-30 5587 1,640.70 1-25 2,567.30
1-10 5581 475.50 Total $15,052.30 1-28 2,886.20
1-17 5582 801.20 1-30 1,025.00
1-31 2,347.00
Total $19,008.60
The bank statement contained two memoranda:
A credit of $2,655 for the collection of a $2,500 note for Jolly Company plus interest of $190 and less a collection fee of $35.00. Jolly Company has not accrued any interest on the note.
2. A debit of $633.45 for an NSF check written by J. Smith, a customer. On January 31, the check had not been re-deposited in the bank.
At January 31, the cash balance per the books was $14,206.15 and the cash balance per the bank statement was $19,200.00.
The bank did not make any errors but Jolly Company made two errors.
Instructions
(a) Prepare the bank reconciliation at January 31, 2010
(b) Prepare the adjusting entries based on the reconciliation. (Note: The correction of any errors pertaining to recording checks should be made to Accounts Payable. The correction of any errors relating to recording cash receipts should be made to Accounts Receivable.)
Explanation / Answer
Rolling Company Bank reconciliation Statement As On Jan 31.2010. Details Amt $ Balance as on Jan 31.2010. as per Bank statement 19,200.00 Less : Checks Outstanding Chk Nos Check 5574 995.00 Check 5575 670.50 Check 5578 579.10 Check 5582 801.20 Check 5584 983.00 Check 5585 1,389.50 Total Check Outstanding 5,418.30 (5,418.30) Add Deposits in transit 2,347.00 Add Chk deposit 1-23 wrong entry in GL= 9 Add : Wrong entry Chk 5586 in GL= 90 Less: Note collection plus interest not in GL (2,690.00) Add Bank Collection fee not in GL= 35.00 Add NSF not in Cash GL 633.45 Cash Balance as per Cash GL Jan 31.2010. 14,206.15 Adjusting Entries Account Title Dr $ Cr $ Cash 9.00 Accounts Receivable 9.00 ( wrong deposit entry 23-1 Cash 90.00 Accounts Payable 90.00 ( Wrong entry chk 5586 rectified) Cash 2,500.00 Note Receivable 2,500.00 ( recording note payment) Interest Income 190.00 Cash 190.00 ( recording Interest on Note) Cash 35.00 Bank Charges 35.00 ( Recording bank collection fees) Cash 633.45 Accounts Receivable 633.45 ( recording NSF)
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