Question
On March 31, 2019, Home Decorating Pavilion received a bank statement showing a balance of $9,650. The balance in the firm's checkbook and Cash account
On March 31, 2019, Home Decorating Pavilion received a bank statement showing a balance of $9,650. The balance in the firm's checkbook and Cash account on the same date was $10,130. The difference between the two balances is caused by the items listed below.
- A $2,775 deposit made on March 30 does not appear on the bank statement.
- Check 358 for $435 issued on March 29 and Check 359 for $1,550 issued on March 30 have not yet been paid by the bank.
- A credit memorandum shows that the bank has collected a $1,100 note receivable and interest of $110 for the firm.
- A service charge of $15 appears on the bank statement.
- A debit memorandum shows an NSF check for $475. (The check was issued by Dane Jaris, a credit customer.)
- The firm's records indicate that Check 341 of March 1 was issued for $700 to pay the month's rent. However, the canceled check and the listing on the bank statement show that the actual amount of the check was $600.
- The bank made an error by deducting a check for $510 issued by another business from the balance of Home Decorating Pavilions account.
Required:
- Prepare a bank reconciliation statement for the firm as of March 31, 2019.
- Record entries for any items on the bank reconciliation statement that must be journalized.
On March 31, 2019, Home Decorating Pavilion received a bank statement showing a balance of $9,650. The balance in the firm's checkbook and Cash account on the same date was $10,130. The difference between the two balances is caused by the items listed below.
- A $2,775 deposit made on March 30 does not appear on the bank statement.
- Check 358 for $435 issued on March 29 and Check 359 for $1,550 issued on March 30 have not yet been paid by the bank.
- A credit memorandum shows that the bank has collected a $1,100 note receivable and interest of $110 for the firm.
- A service charge of $15 appears on the bank statement.
- A debit memorandum shows an NSF check for $475. (The check was issued by Dane Jaris, a credit customer.)
- The firm's records indicate that Check 341 of March 1 was issued for $700 to pay the month's rent. However, the canceled check and the listing on the bank statement show that the actual amount of the check was $600.
- The bank made an error by deducting a check for $510 issued by another business from the balance of Home Decorating Pavilions account.
Required:
- Prepare a bank reconciliation statement for the firm as of March 31, 2019.
- Record entries for any items on the bank reconciliation statement that must be journalized.
Under Additions the options to record the reconciliation are as follows:
- Bank service charge
- Check 358 of March 29
- Check 359 of March 30
- Check incorrectly charged to account
- Correction of error recording check 341
- Deposit of March 30 in transit
- Note receivable and interest collected by bank
- NSF check
Under Deductions the options to record the reconciliation are as follows:
- Bank service charge
- Check 358 of March 29
- Check 359 of March 30
- Check incorrectly charged to account
- Correction of error recording check 341
- Deposit of March 30 in transit
- Note receivable and interest collected by bank
- NSF check
The second part to this is to record appropriate journal entries with the following information that must be journalized:
-
1
A credit memorandum shows that the bank has collected a $1,100 note receivable and interest of $110 for the firm.
-
2
The firm's records indicate that Check 341 of March 1 was issued for $700 to pay the month's rent. However, the canceled check and the listing on the bank statement show that the actual amount of the check was $600.
-
3
A debit memorandum shows an NSF check for $475. (The check was issued by Dane Jaris, a credit customer.)
-
4
A service charge of $15 appears on the bank statement.
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