Identify if the item should be included as a reconciling item in Sage Hill's bank reconciliation. Indicate if a journal entry will be needed to correct any of the account for Sage Hill. Journal Entry? Type of reconciling item 1. Add to the cash balance per books Yes A deposit of collections on account from customers was made, but the amount did not match what appeared on the bank statement. The correct amount of $4,270, shown on the bank statement should have been used in Sage Hill's books instead of the amount recorded of $4,365. $. Included on the bank statement is an automatic charge for Sage Hill Service's monthly mortgage payment. The amount of the payment was $890 of which $535 is principal. Sage Hill's bookkeeper always waits for the transaction to appear on the bank statement before recording it because the amount varies from month to month. . 2. Deduct from the cash balance per bank Yes 3. 3 When retracing cheque payments to the journals during the bank reconciliation process, it was , noticed that a $1,450 cheque, payable to Sage Hill Service's landlord for the current month's rent, was , charged to Advertising Expense. Does not affect the bank reconciliation Yes 4. On the previous month's bank reconciliation, an outstanding cheque for $360 for a final pay cheque of a part-time employee had not yet been cashed. On the current month bank statement, the cheque has still not cleared the bank account. Deduct from the cash balance per bank V No 5. 5 Add to the cash balance per books V Yes Sage Hill has an agreement with RBC to collect notes receivable and any outstanding interest on the notes. Sage Hill's bookkeeper waits to record any collection until the amounts are reported by RBC, because it is not predictable how much of the collection will be interest. On the current bank statement, an entry appears for a deposit of $1,125 for a collection of a note with a principal amount of $975. Appearing on the bank reconciliation is a charge for an NSF cheque of $610 which had been deposited earlier in the month by Sage Hill as a payment on account by a new customer. RBC had added an additional charge of $25 for processing the NSF cheque. Because the customer was new, Sage Hill warned the customer that any NSF charges would be added to the amount owing from the customer. 6. Deduct from the cash balance per books V Yes 7. A cheque correctly issued in the amount of $490 as a payment on account to a supplier was incorrectly recorded in the books as $590. Add to the cash balance per books Yes 8. Two cheques totalling $321, which were outstanding at the end of the last month, cleared in the current month's bank statement. Does not affect the bank reconciliation V No 9. . Included in the bank statement are charges of $38 for the use of debit cards by Sage Hill's customers. Sage Hill waits for the information to be processed by the bank before recording them in the books. Deduct from the cash balance per books Yes Prepare the necessary journal entries to correct Sage Hill's accounts. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) No. Account Titles and Explanation Debit Credit 1. 2. 3. 4. 5. 6. 7. 8. DONO Mangane 9. e Textbook and Media List of Accounts
