P8-4A

Prepare a bank reconciliation and adjusting entries from detailed data.

(LO 3)

The bank portion of the bank reconciliation for Langer Company at November 30, 2017, was as follows.

LANGER COMPANY Bank Reconciliation November 30, 2017
Cash balance per bank		$14,367.90
Add: Deposits in transit		2,530.20
		16,898.10
Less: Outstanding checks
Check Number	Check Amount
3451	$2,260.40
3470	720.10
3471	844.50
3472	1,426.80
3474	1,050.00	6,301.80
Adjusted cash balance per bank		$10,596.30

The adjusted cash balance per bank agreed with the cash balance per books at November 30.

The December bank statement showed the following checks and deposits.

Bank Statement
Checks			Deposits
Date	Number	Amount	Date	Amount
12-1	3451	$ 2,260.40	12-1	$ 2,530.20
12-2	3471	844.50	12-4	1,211.60
12-7	3472	1,426.80	12-8	2,365.10
12-4	3475	1,640.70	12-16	2,672.70
12-8	3476	1,300.00	12-21	2,945.00
12-10	3477	2,130.00	12-26	2,567.30
12-15	3479	3,080.00	12-29	2,836.00
12-27	3480	600.00	12-30	1,025.00
12-30	3482	475.50	Total	$18,152.90
12-29	3483	1,140.00
12-31	3485	540.80
	Total	$15,438.70

The cash records per books for December showed the following.

Cash Payments Journal
Date	Number	Amount	Date	Number	Amount
12-1	3475	$1,640.70	12-20	3482	$ 475.50
12-2	3476	1,300.00	12-22	3483	1,140.00
12-2	3477	2,130.00	12-23	3484	798.00
12-4	3478	621.30	12-24	3485	450.80
12-8	3479	3,080.00	12-30	3486	889.50
12-10	3480	600.00	Total		$13,933.20
12-17	3481	807.40

Cash Receipts Journal
Date	Amount
12-3	$ 1,211.60
12-7	2,365.10
12-15	2,672.70
12-20	2,954.00
12-25	2,567.30
12-28	2,836.00
12-30	1,025.00
12-31	1,690.40
Total	$17,322.10

The bank statement contained two memoranda:

1.A credit of $5,145 for the collection of a $5,000 note for Langer Company plus interest of $160 and less a collection fee of $15. Langer Company has not accrued any interest on the note.

2.A debit of $572.80 for an NSF check written by L. Rees, a customer. At December 31, the check had not been redeposited in the bank.

At December 31, the cash balance per books was $12,485.20, and the cash balance per the bank statement was $20,154.30. The bank did not make any errors, but two errors were made by Langer Company.

Instructions

(a)

Using the four steps in the reconciliation procedure, prepare a bank reconciliation at December 31.

Adjusted balance per books $16,958.40

(b)

Prepare the adjusting entries based on the reconciliation.

(Hint: The correction of any errors pertaining to recording checks should be made to Accounts Payable. The correction of any errors relating to recording cash receipts should be made to Accounts Receivable.)