Question

Here is the problem: The following information pertains to Huston Company as of November 30, 2019: 1. Balance per the bank statement as of November 30, 2019, was $49.210. 2. Balance per Huston Company's Cash account at November 30, 2019, was $49,356. 3. Adeposit made later November 30 of $4,777 did not appear on the bank statement. 4. Outstanding checks as of November 30 totaled $7.222 During November, the bank credited Huston Company with the proceeds of a note 5. that it had collected for the company. Interest in the amount of $50 was included in the $6,050 total 6. Bank service charges and collection charges for November were $20. Comparison of the canceled checks with the check register revealed that one check in 7. the amount of $984 had been recorded in the books as $948. The check had been issued in payment of an account payable. A review of the deposit slips with the bank statement showed that a deposit for 8. $2,300 of a company with a similar bank account number had been credited to the Huston Company account in error A $170 check received from a customer in payment their account was returned with the bank statement and marked NSF. During November, the bank took $12.145 from Huston's account in order to pay a $12,000 note and the associated interest owed by Huston Company to Jones Company in accordance with a pre arranged agreement between Huston and the bank. Huston Company had not yet recorded the payment until the time they received the bank statement An examination of the cash receipts and the deposit tickets revealed that the 11. bookkeeper had erroneously recorded a $1.400 check from a customer, Bill Baker, as $140. The bank statement showed a credit to the company's account for interest earned on the account balance in November in the amount of $170. 12 Required: A. Prepare a bank reconciliation as of November 30, 2019. B. Prepare the journal entry or entries necessary to adjust the accounts as of November 30, 2019

for part "A" their needs to be balance per the bank and balance per the books.

Answer 1

A. Bank Reconciliation Statement can be prepared in the following manner:

Balance as per bank statement = $49,210

Add: Deposits in transit = $4,777

Less: Outstanding Checks = $7,222

Less: Deposit (in error) = $2,300

Adjusted cash balance = $44,465

Journal entries to be booked will be:

Date	Description	Debit ($)	Credit ($)	Workings
a	Cash	6,050
	Notes Receivables		6,000	given
	Interest Revenue		50	given
b	Bank Service charges	20		given
	Cash		20
c	Account Payable	36		984-948
	Cash		36
d	Accounts Receivables	170		NSF check
	Cash		170
e	Cash	1,260		1400-140
	Accounts Receivables		1,260
f	Cash	170		ineterest earned
	Interest Revenue		170
g	Accounts Payable	12,000
	Interest Expense	145
	Cash		12,145	payment by bank directly

Please comment in case of any issue and I will be happy to help.