West Company shows the following data: Balance per cash account $3,260 Balance p

Question

West Company shows the following data: Balance per cash account $3,260 Balance per bank statement 3,908 Outstanding Checks 1,400 Deposit in transit 3,972 Bank service charge 75 Note collected by bank ($340=interest) 3,340 Check returned by the bank for insufficient funds 225 Error in recording a check for office supplies. The amount on the check is $350, but it was recorded as $530. REQUIRED: Please prepare a bank reconciliation for the company as of 11/30/15. (15) Please record any necessary journal entries for Bass Company. (14)

Explanation / Answer

West Company Bank Reconciliation Statement Details Amt $ Balance as per Bank Statement                  3,908 Less Outstanding Checks               (1,400) Add Deposits in transit                  3,972 Add Bank Service charges not in cash book                        75 Less Note & Interest collected not in cash book               (3,340) Add NSF not in cash book                     225 Less Check error in Cash Book                   (180) Balance as per Cash Book                  3,260 Balance to be reported as Bank / Cash Balance Balance as per Cash Book                  3,260 Less Bank Service charges                       (75) Add Note collected                  3,000 Add Interest collected                     340 Less NSF                   (225) Add Correction of check error                     180 Reconciled Balance at month end                  6,480 Journal Entries Account Title Dr $ Cr $ Cash                   75 Bank Charges                        75 Note Receivable             3,000 Interest Income                340 Cash                  3,340 Accounts Receivable                     225 Cash                225 Accounts Payable                  180 Cash                     180

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