Question

J. Fepare a October 31, 2020, and prepare the necessary entries. QS 7-11 Bank reconciliation LO6 countant has been asked to prepare the bank reconciliation for Ultimate Discs (UD), a store that sells frisbees. You log in to the online bank statement and note that the bank balance is $66,362 as at March 31, 2020. The amount of cash recorded in the accounting records (the books) is $64,800. • You go through the online bank statement and notice an electronic fund transfer from a customer for $2,300. This customer had purchased goods on account. • UD earned $48 of interest income, but was also charged a $25 service charge as the cash balance dropped below the minimum balance of $70,000 this month. • The bank notified you that one of the cheques you had deposited had insufficient e cheques you had deposited had insufficient funds in that customer's bank account. The cheque and bank charges are $761. Required a. Prepare a bank reconciliation at March 31, 2020. b. Prepare the necessary journal entries.

Answer 1

Bank Reconciliation as at March 31,2020
Particulars	$
Balance as per Bank Statement	66362
-Electronic Fund transfer by customer not credited in books	-2300
-Interest Income not credited in books	-48
+Service charge not debited in books	25
+Cheque deposited not credited in bank due to insufficient funds in customer's account and bank charges	761
Balance as per Cash account in books	64800

Journal Entries
Accounts	Debit ($)	Credit ($)
Bank Dr	2300
To Accounts Receivable		2300
(Being customer paid by Electronic fund transfer.)
Bank Dr	48
To Interest Income		48
(Being Interest income credited in bank.)
Service Charges	25
To Bank		25
(Being service charges debited in bank.)
Accounts Receivable Dr	761
To Bank		761
(Being cheque of customer not passed due to insufficient funds and bank charges debited.)