Bank Reconciliation The bank reconciliation made by Sandler Company, a sole prop

Question

Bank Reconciliation The bank reconciliation made by Sandler Company, a sole proprietorship, on March 31 showed:

The following bank statement is available for April 2012.

A list of deposits made and checks written during April is shown below:

The Cash in Bank account balance on April 30 was $16,644. In reviewing checks returned by the bank, the accountant discovered that check No. 811 written for $391 for delivery expense, was recorded in the cash disbursements journal as $326. The NSF check for $600 was that of customer R. Koppa, deposited in April.

Required
a. Prepare a bank reconciliation for Sandler Company at April 30.
b. Prepare the necessary journal entries to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation.

a.

b.

Deposit in transit of $1,320 Outstanding checks no.797 $540 no.804 $1,068 The reconciled cash balance on March 31 was $14,064

Explanation / Answer

1) Bank Recociliation Balance as per bank 17,467 Add: Deposits in transit 1,710 19,177 less:outstanding checks chq no 797 540 chq no 812 1,138 Chq no 815 446 chq no 816 1,050 3,174 Adjusted balance as per bank 16,003 Balance as per cash book 16,644 Add: interest earned 72 16,716 less: NSF 600 Service charge 48 Error in recording (391-326) 65 713 Adjusted balance as per cash 16,003 2) Journal Entry Account titles & explanations Debit Credit Cash 72 interest earned 72 Accounts receivable 600 cash 600 Service charge 48 cash 48 Delivery expense 65 Cash 65

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