Alpha Company had the following banking information from its bank statement date
ID: 2564038 • Letter: A
Question
Alpha Company had the following banking information from its bank statement dated 7/31/17
Item
Amount
Cash Balance per bank 7/3/17
3,350
Bank Service Charges
75
Collection of Note Receivable from Mr. Yankee including the interest of 145 Customer (Mr. Welcher)
3,145
Returned check NSF
225
The following additional information was determined from a review of the cash payments and receipts and the check register for Alpha Company.
1. The following checks had not cleared the bank as paid:
Date
Check #
Accounts Payable
Amount
5/25/17
1005
Bravo Office Supply
250
7/15/17
1025
Zulu Electric Company
1,900
7/30/17
1030
Bravo Office Supply
250
2. The following information was recorded in Alpha’s cash receipts ledger and have not yet been recorded in the bank statement:
Date
Item
Amount
5/25/17
Store Cash Sales
200
7/31/17
Store Cash Sales
200
7/31/17
Check from Store Sales
5,500
7/31/17
Cash Balance per GL 7/31/17
4,005
Prepare the compound general journal needed to record the adjustments required to reconcile the 7/31 cash book balance to the adjusted bank balance.
General Journal ( Mind that there are 6 lines and I am not allowed to modify it!). This is how it should look:
Date
Account
Debit
Credit
7/31/17
*
*
*
*
*
*
Item
Amount
Cash Balance per bank 7/3/17
3,350
Bank Service Charges
75
Collection of Note Receivable from Mr. Yankee including the interest of 145 Customer (Mr. Welcher)
3,145
Returned check NSF
225
Explanation / Answer
JOURNAL
Date
Account
Debit
Credit
1/31/17
Cash
2845
Miscellaneous Expense
75
Accounts Receivable
225
Notes Receivable
3145
(Being adjustment entry for Bank reconciliation)
Workings
Cash Balance as per cash account
4005
Add: Collection of note receivable
3145
7150
Less: Service Charges
75
NSF Check
225
300
Adjusted cash Balance
6850
Bank Balance as per Bank account
3350
Add: Deposits in Transit (5500+200+200)
5900
9250
Less: Outstanding Checks
2400
Adjusted Bank Balance
6850
JOURNAL
Date
Account
Debit
Credit
1/31/17
Cash
2845
Miscellaneous Expense
75
Accounts Receivable
225
Notes Receivable
3145
(Being adjustment entry for Bank reconciliation)
Workings
Cash Balance as per cash account
4005
Add: Collection of note receivable
3145
7150
Less: Service Charges
75
NSF Check
225
300
Adjusted cash Balance
6850
Bank Balance as per Bank account
3350
Add: Deposits in Transit (5500+200+200)
5900
9250
Less: Outstanding Checks
2400
Adjusted Bank Balance
6850
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