Problem 7-9A Preparing a bank reconciliation and recording adjustments LO6

Stewart Recording Studio, owned by Ron Stewart, showed the following bank reconciliation at March 31:

Stewart Recording Studio
Bank Reconciliation
March 31, 2020
Bank statement balance				$	21,300	Book balance	$	29,825
Add:
Deposit of March 31 in transit					9,637
				$	30,937
Deduct:
Outstanding cheques:
#14	$	807
#22		305			1,112
Adjusted bank balance				$	29,825	Adjusted book balance	$	29,825

Cash								Acct. No. 101
Date			Explanation	PR	Debit		Credit	Balance
2020
March	31		Balance					29,825
April	30			CR17	70,618			100,443
	30			CD13			88,940	11,503

A list of deposits made and cheques written during April, taken from the Cash Receipts Journal and Cash Disbursements Journal, is shown below:

Deposits Made
April	7		$	682
	13			4,544
	18			5,831
	23			13,736
	27			1,730
	30			44,095
Total April Cash Receipts			$	70,618

Cheques Written
No.	23		$	5,133
	24			3,113
	25			931
	26			302
	27			4,119
	28			4,900
	29			19,099
	30			39,760
	31			404
	32			11,179
Total April Cash Disbursements			$	88,940

The following bank statement is available for April:

Bank Statement
To: Stewart Recording Studio						April 30, 2020 Bank of Canada
Cheques/Charges						Deposits/Credits			Balance
									21,300
#31	04/03		404			04/03	9,637		30,533
#28	04/07		9,400			04/07	682		21,815
#26	04/13		302			04/13	4,544		26,057
NSF	04/18		13,828			04/18	5,831		18,060
#24	04/23		3,113			04/23	13,736		28,683
#23	04/27		5,133			04/27	1,730		25,280
#29	04/30		19,099			04/30	112,000		118,181
PMT	04/30		15,466						102,715
INT	04/30		384						102,331
SC	04/30		177						102,154
NSF = Not Sufficient Funds		SC = Service Charge				PMT = Payment of Principal on the loan			INT = Interest on Bank Loan

• In reviewing cheques returned by the bank, the bookkeeper discovered that cheque #28, for delivery expense, was recorded in the Cash Disbursements Journal correctly as $4,900.
• The NSF cheque for $13,828 was that of customer Oprah Winney, deposited in March.
• On the bank statement, the payment for $15,466 is regarding a note payable.
• There is also a deposit of $112,000 dated April 30. It is an investment made by the owner into the business (the bank transferred the funds electronically from the owners personal account to his business account, which is why it was not recorded in the Cash Receipts Journal).

Required: a. Prepare a bank reconciliation for Stewart Recording Studio at April 30.

b. Prepare the necessary journal entries to bring the General Ledger Cash account into agreement with the adjusted balance on the bank reconciliation.