E5-9 Prepare bank reconciliation and adjustments. This information relates to th

Question

E5-9 Prepare bank reconciliation and adjustments. This information relates to the Cash account in the ledger of Howard Company. Balance September 1 - $16,400; Cash deposited - $64,000 Balance September 30 - $17,600; Checks written - $62,800 The September bank statement shows a balance of $16,500 at September 30 and the following memoranda. Credits Debits Collection of electronic funds transfer $1,830 NSF checks: H. Kane $560 Interest earned on checking account 45 Safety deposit box rent 60 At September 30, deposits in transit were $4,738 and outstanding checks totaled $2,383. Instructions (a) Prepare the bank reconciliation at September 30, 2017. (b) Prepare a tabular analysis for the adjustments at September 30, assuming the NSF check was from a customer on account. Use the following column headings: Cash, Accounts Receivable, Revenues, and Expenses. Include margin explanations for the changes in revenues and expenses. NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

Explanation / Answer

SOLUTION

(A) Bank Reconciliation statement

(B)

Particulars Amount ($) Cash balance per bank statement 16,500 Add: Deposits in transit 4,738 21,238 Less: Outstanding checks (2,383) Adjusted cash balance per bank 18,855 Cash balance per books 17,600 Add: Collection of note receivable 1,830   Interest earned 45 19,475 Less: NSF check (560) Safety deposit box rent (60) Adjusted cash balance per books 18,855

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