Question

The following is given for The Market Place on September 30, 19X4. Cash book balance $14,630 Cash bank balance 10,921 Outstanding checks 2,160 Service charges 38 Interest on checking 54 NSF check 401 Deposits in transit 6,345 Book error - recorded a deposit for cash sales of $ 173 as $137. Note collected by bank - $750 note, $75 interest. Required: 1. Prepare a bank reconciliation for The Market Place as of September 30. 2.Prepare the necessary journal entries to adjust the accounts.

Answer 1

The Market Place
Bank Reconciliation
September 30
Bank statement balance	10,921	Book balance	14,630
Add:		Add:
Deposit in transit	6,345	Interest revenue earned	54
		Bank collection of receivables	825
		Correction of book error	36
Less:		Less:
Outstanding check	-2,160	Bank service charge	-38
		NSF Check	-401
Adjusted bank balance	$15,106	Adjusted book balance	$15,106

Date	Account Titles and Explanation	Debit	Credit
September 30	Cash	$825
	Note receivable		$750
	Interest revenue		$75
	( To record note receivable)
September 30	Cash	$54
	Interest revenue		$54
	( To record interest earned)
September 30	Accounts receivable	$401
	Cash		$401
	( To record NSF check)
September 30	Bank Service charge	$38
	Cash		$38
	( To record bank service charge)
September 30	Cash	$36
	Sales		$36
	( To record cash sales book error)

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