PROBLEM 2 - Worth SIXTEEN (16) points The April 30, 2017, The cash balance per b

Question

PROBLEM 2 - Worth SIXTEEN (16) points The April 30, 2017, The cash balance per books was $2,400. The bank balance per bank statement was S6.200. Outstanding checks amounted to $850, and deposits in transit wer nent contained an NSF check for $550, and a service charge for $25. Required a) Prepare a bank reconciliation to determine the true cash balance at (Hint: you will need to derive true cash balance unadjusted book balance). April 30. from both unadjusted bank balance and t any necessary journal entries.

Explanation / Answer

Bank Reconciliation

30-Apr

Bank Statement

Company's Books

Ending Balance as per Bank Statement

$6,200

Ending balance as per cash account

$8,325

Additions:

Less:

Deposit in transit

$2,400

NSF Check

$550

$8,600

Bank charges

$25

($575)

Less: outstanding checks

($850)

Corrected cash balance

$7,750

Corrected bank balance

$7,750

Necessary Journal Entries:

Date

Account Titles and Explanation

Debit

Credit

30-Apr

Accounts Receivable

$550

Cash

$550

(To record NSF check)

30-Apr

Bank Service charges

$25

Cash

$25

(To record bank service charges for the month of April)

Bank Reconciliation

30-Apr

Bank Statement

Company's Books

Ending Balance as per Bank Statement

$6,200

Ending balance as per cash account

$8,325

Additions:

Less:

Deposit in transit

$2,400

NSF Check

$550

$8,600

Bank charges

$25

($575)

Less: outstanding checks

($850)

Corrected cash balance

$7,750

Corrected bank balance

$7,750

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