Question

Harry Carter Corporation operates four bowling alleys. The business just received the October 31, 2018, bank statement from City National Bank, and the statement shows an ending balance of $890. Listed on the statement are an EFT rent collection of $415, a service charge of $9, NSF checks totaling $65, and a $26 charge for printed checks. In reviewing the cash records, the business identified outstanding checks totaling $460 and a deposit in transit of $1,765. During October, the business recorded a $240 check by debiting Salaries Expense and crediting Cash for $24. The business's Cash account shows an October 31 balance of $2,096. Read the requirements. Requirement 1. Prepare the bank reconciliation at October 31. Prepare the bank portion of the reconciliation, followed by the book portion of the reconciliation i Requirements Harry Carter Corporation Bank Reconciliation October 31, 2018 Bank: 1. Prepare the bank reconciliation at October 31. 2. Journalize any transactions required from the bank reconciliation. ADD: Print Done LESS: Books: ADD: LESS:

Answer 1

SOLUTION

1. Bank reconciliation statement

Particulars	Amount ($)	Amount ($)
Bank:
Ending balance as per Bank Statements		890
Add: Deposits in transit		1,765
		2,655
Less: Outstanding Checks		(460)
Adjusted balance as per bank statement		2,195
Books:
Ending Balance as per cash books		2,096
Add: Rent Collection		415
		2,511
Less: NSF Checks	65
Service Charge	9
Printing check charges	26
Incorrect recording of check (240-24)	216	(316)
Adjusted balance as per books		2,195

2. Journal entries

Date	Accounts titles and Explanation	Debit ($)	Credit ($)
Oct.31	Cash	415
	Rent Revenue		415
	(Being note collected by bank)
Oct.31	Salary Expense	216
	Cash		216
	(To record correction entry of salary payment)
Oct.31	Accounts receivables	65
	Cash		65
	(Being check dishonored by bank)
Oct.31	Bank Expense	26
	Cash		26
	(Check printing charges debited by bank)
Oct.31	Service Charges	9
	Cash		9
	(Being service charges debited by bank)