Bank reconciliation-computations and journal entry The Cash account in the ledge

Question

Bank reconciliation-computations and journal entry The Cash account in the ledger of Pine Golf Club shows a balance of $11,925 at December 31, 2018. The December 31 bank statement shows a balance of $10,440. The only reconciling items consist of Bank service charges of $32 Deposit in transit of $1,813 NSF check from customer L. Diamond in the amount of $126 Error in recording check no. 970 for utilities: check was written in the amount of $834 but was recorded in Pine's accounting records as $384. Outstanding checks. (a) What is the amount of the adjusted cash balance at December 31, 20187 (b) What is the total amount of outstanding checks at December 31, 2018? (c) Record the journal entry necessary, if any, to adjust Pine's Golf Club accounting records at December 31, 2018. (An explanation is not required; a single compound journal entry is acceptable.)

Explanation / Answer

a Adjusted Cash balance at December 31,2018 Book Ending Balance $11,925 NSF Check -126 Book Error (384-834) -450 Bank Service Charge -32 Adjusted Cash Balance $11,317 b Outstanding Checks ar December 31,2018 Bank Bank ending Balance 10440 Deposits in Transit 1,813 Adjusted Bank Balance 12,253 Adjusted Cash Balance 11,317 OS Checks 936 c Adjusting Entries from December 2018 Bank Reconciliation Dr Cr 1) Accounts Receivable 126 Cash 126 To record NSF check returned 2) Accounts Payable 450 Cash 450 To correct error in recording amount paid on account 3) Bank Service Charge Expense 32 Cash 32 To record Bank Service Charge expense for December 2018

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