The March bank statement showed the following for Yap Co.:

Additional information:

1. The bank statement contained three debit memoranda:

? An NSF cheque of $595 that Yap had deposited was returned due to insufficient funds in the maker?s bank account. This cheque was originally given to Yap by Mr. Jordan, a customer, in payment of his account. Yap believes it will be able to collect this amount from Mr. Jordan.

? A bank loan payment (LN), which included $125 of interest and a $1,000 payment on the principal. Use Notes Payable.

? A service charge (SC) of $49 for bank services provided throughout the month.

2. The bank statement contained one credit memorandum for $23 of interest (IN) earned on the account for the month.

3. The bank made an error processing cheque #3478. No other errors were made by the bank.

Yap?s unadjusted cash balance per its general ledger on March 31 is $8,495. Yap?s list of cash receipts and cash payments showed the following for March:

Instructions

a. Prepare a bank reconciliation at March 31.

b. Prepare the necessary adjusting entries at March 31. The correction of any errors in the recording of cheques should be made to Accounts Payable. The correction of any errors in the recording of cash receipts should be made to Accounts Receivable.

The company will prepare entries to record items found in the above bank reconciliation (see part [b] in the instructions). Describe any other follow-up actions required regarding the other reconciling items in Yap Co.?s bank reconciliation.

Transcribed Image Text:

YAP CO. Bank Statement March 31, 2021 Cheques and Other Debits Date Number Amount Deposits Amount Feb. 28 $12,742 Mar. 3 3470 $1,535 $2,530 13,737 4 3471 845 12,892 3472 3473 1,427 1,221 12,686 275 12,411 10 NSF 595 11,816 11 3475 487 1,745 13,074 14 3477 915 12,159 17 3476 1,828 2,283 12,614 20 1,832 14,446 2,330 1,080 21 3474 12,116 26 3478 2,657 13,693 31 LN 1,125 12,568 31 3480 1,679 10,889 31 49 IN 23 10,863