Coffee Plus, a coffee shop, had the following information for January 31, 2019:

Question

Coffee Plus, a coffee shop, had the following information for January 31, 2019:

Balance on bank statement January 31, 2019 $42,000

Service charges for January 2019 25

Interest earned 18

Cash account balance on books January 31, 2019 $39,500

Deposits in transit $18,000

Check received by us from customer was returned by bank as NSF $1,900

Collections of AR made directly by the bank $3,900

Outstanding checks $19,307

Check we wrote for $4,000 recorded in error by bank as $4,800

Prepare the bank reconciliation for January 2019 and prepare the necessary journal entried for January 31, 2019.

Explanation / Answer

Bank Reconciliatio Balance as per bank statement 42,000 Add: Deposits in transit 18,000 bank erro 800 18,800 60,800 less: Checks outstanding -19307 balance as per Bank statement 41,493 Balance as per cash ledger 39,500 Add: Collection of A/R 3,900 interest Earned 18 3,918 43,418 less: Service charges 25 NSF 1,900 -1,925 Adjusted Cash Balance 41,493 Journal Entries Accounting titles & Explanations Debit Credit Cash 3,900 Accounts receivable 3,900 cash 18 interest income 18 Service charge 25 cash 25 Accounts receivable 1,900 cash 1,900

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