The October 31 bank statement of Wollaston’s Healthcare has just arrived from State Bank. To prepare the bank reconciliation, you gather the following data:
a. The October 31 bank balance is $5,580.
b. The bank statement includes two charges for NSF checks from customers. One is for $370 (#1), and the other is for $110 (#2).
c. The following Wollastons checks are outstanding at October 31:
Check No. .....Amount
237.......$ 90
288....... 150
291....... 550
294....... 630
295....... 70
296....... 120
d. Wollaston’s collects from a few customers by EFT. The October bank statement lists a $1,500 EFT deposit for a collection on account.
e. The bank statement includes two special deposits that Wollaston’s hasn’t recorded yet: $850 for dividend revenue and $30 for the interest revenue Wollaston’s earned on its bank balance during October.
f. The bank statement lists a $ 10 subtraction for the bank service charge.
g. On October 31, the Wollaston’s treasurer deposited $320, but this deposit does not appear on the bank statement.
h. The bank statement includes a $500 deduction for a check drawn by Multi-State Freight Company. Wollaston’s notified the bank of this bank error.
i. Wollaston’s Cash account shows a balance of $2,900 on October 31.
Requirements
1. Prepare the bank reconciliation for Wollaston’s Healthcare at October 31, 2016.
2. Journalize any required entries from the bank reconciliation. Include an explanation for each entry.