The bank reconciliation statement for Watson Pty Ltd at 31 October 2015 is shown here: 

The November bank statement showed the following cheques and deposits: 

The company’s cash records for November showed the following: 

The bank statement contained the following two items:

1. A credit of $1905 for the collection of an $1800 note for Watson Pty Ltd; interest of $120; a collection fee of $15. Watson Pty Ltd has not accrued any interest.

2. A debit for the printing of additional company cheques, $70. At 30 November the cash balance as per company records was $11 133.90 and the cash balance as per bank statement was $17 394.60. The bank did not make any errors, but two errors were made by Watson Pty Ltd.

Required

(a) Using the reconciliation procedure described on pp. 414–15, prepare a bank reconciliation as at 30 November.

(b) Prepare the adjusting entries based on the reconciliation. 

Transcribed Image Text:

WATSON PTY LTD Bank reconciliation statement as at 31 October 2015 Cash balance as per bank statement Add: Outstanding deposits Less: Unpresented cheques Cash balance as per ledger Cheque number 2451 2470 2471 2472 2474 Cheque amount $1260.40 720.10 844.50 426.80 1050.00 $12367.90 Cr 1530.20 13898.10 4301.80 $ 9596.30 Dr