At December 31 the cash balance per books of Heinisch Company was $12,485.20, an

Question

At December 31 the cash balance per books of Heinisch Company was $12,485.20, and the cash balance per the bank statement was $20,154.30. The bank did not make any errors, but two errors were made by Heinisch Company The December bank statement for Heinisch Company showed the following checks and deposits. Bank Statement ec Deposits Date 12-7 12-4 12-8 12-31 Number Amount 3472 Date 12-4 12-16 12-21 12-30 Amount 1,211.60 2,672.70 2,954.00 1,025.00 3474 1,426.80 3475 3479 1,640.70 1,300.00 450.80 The cash records per books for December showed the following cash payments and receipts. Date Check Number Amount 12-1 12-1 12-1 12-1 12-2 12-4 12-17 12-23 12-24 12-30 Cash deposited Date 12-3 12-15 12-20 12-30 12-31 Amount 720.10 1,426.80 1,050.00 1,640.70 1,300.00 621.30 807.40 798.00 540.80 1,889.50 $1,211.60 2,672.70 2,945.00 1,025.00 1,190.40 3471 3472 3473 3474 3475 3476 3477 3478 3479 3480 In addition, the bank statement contains the following items: 1. The collection of a $3,500 note and $145 of interest less a collection fee of $20 from a customer of Heinisch Company. 2. A NSF check of $725.80 written by D. Chagnon, a customer. At December 31, the check had not been redeposited in the bank. 3. Bank service charge of $25. Required 1. Prepare bank reconciliation at December 31. 2. Prepare the required journal entries based on the reconciliation. Omit explanations.

Explanation / Answer

1.

Working:

2. Journal entries:

HEINISCH COMPANY Bank reconciliation statement for the month ending December 31. Balance as per bank statement 20154.30 Balance as per cash book 12485.20 Additions: Additions: Cash in transit (12-31) 1190.40 Outstanding checks 5886.30 Collection charges for note 20.00 Check no.3479 wrong entry 90.00 NSF check 725.80 Cash deposit wrong entry (12-20) 9.00 Service charge 25.00 Collection of note + interest (3,500+145) 3645.00 Total additions 1961.20 Total additions 9630.30 Deductions: Deductions: Outstanding checks 5886.30 Cash in transit (12-31) 1190.40 Check no.3479 wrong entry 90.00 Collection charges for note 20.00 Cash deposit wrong entry (12-21) 9.00 NSF check 725.80 Collection of note + interest (3,500+145) 3645.00 Service charge 25.00 Total deductions 9630.30 Total deductions 1961.20 Balance as per cash book 12485.20 Balance as per bank statement 20154.30

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