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On May 31, JB Games Ltd. received its bank statement from the East Coast Savings Bank showing that JB had a balance of $13,600. The
On May 31, JB Games Ltd. received its bank statement from the East Coast Savings Bank showing that JB had a balance of $13,600. The company's general ledger showed a cash balance of $8,740 at that date. A comparison of the bank statement and the accounting records revealed the following information: 1. 2. 3. 4. 5. 6. A cheque from one of JB's customers in the amount of $1,400 that had been deposited during the last week of May was returned with the bank statement as NSF. Bank service charges for the month were $60. The company had written and mailed out cheques with a value of $5,145 that had not yet cleared the bank. Cheque #791, which was a payment for advertising expenses of $130, was incorrectly recorded in the general ledger as $310. During the month, one of JB's customers paid their account using an electronic funds transfer. Their payment was for $3,045. The cash receipts for May 31 amounted to $2,050 and had been deposited in the night drop slot at the bank on the evening of May 31. These were not reflected on the bank statement for May. Prepare the bank reconciliation for JB at May 31. (List items that increase balance as per bank & books first.) JB Games Ltd. Bank Reconciliation As of May 31 Balance Per Bank Statement V Add : Deposits in Transit Less Outstanding heques Balance Per Bank Statement Reconciled Balance Less V Add V NSF Cheaue Bank Service Charges Correction of Cheque #791 EFT Receipts 13,600 2050 5,145 $ 7195 $ 8,740 1,400 60 130 3,045 Balance Per Accounting Records $ 3175 What cash should JB report on its statement of financial position as at May 31? Cash balance reported on the statement of financial position $ 7195 Prepare the journal entries necessary as a result of the bank reconciliation prepared in part "a." (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Cash Accounts Receivable (To record electronic fund transfer) Cash Accounts Payable (To correct error in recording cheque #791) Bank Charges Expense Cash (To record bank charges) Accounts Receivable Cash (To record NSF cheque) Debit 3,045 60 1,400 Credit 3,045 60 1,400
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