Question

Bank Reconciliation The Seattle Boat Company's bank statement for the month of September indicated a balance of $15,400. The company's cash account in the general ledger showed a balance of $12,450 on September 30. Other relevant information includes the following: 1. Deposits in transit on September 30 total $11,440. 2. The bank statement shows a debit memorandum for a check printing charge of $88. 3. Check number 238 payable to Simon Company was recorded in the accounting records for $546 and cleared the bank for this same amount. A review of the records indicated that the Simon account now has a $79 credit balance and the check to them should have been $625. 4. Outstanding checks as of September 30 totaled $12760 5. Check No. 276 was correctly written and paid by the bank for $900. The check was recorded in the accounting records as a debit to accounts payable and a credit to cash for $1,078. 6. The bank returned a NSF check in the amount of $1,232. 7. The bank included a credit memorandum for $2,772 representing a collection ofa customer's note. The principle portion was $2,640 and the interest portion was $132. The interest had not been accrued. Required a. Prepare the September bank reconciliation for Seattle Boat Company. b. Prepare any necessary adjusting entries.

Answer 1

a)

Seattle Boat Company
Bank Reconciliation Statement
September. 30
Balance as per Bank Statement	$15,400.00
Add:
Deposits in transit	$11,440.00
Error by bank
Less:
Outstanding Checks	($12,760)
Adjusted Balance as per Bank Statement	$14,080.00
Balance as per Cash Book	$12,450.00
Add:
Note borrowed from Bank	$2,772
Error by company ($1,078 - $900)	$178
Less:
Bank Service Charge	($88)
NSF Check	($1,232)
Adjusted Balance as per Cash Book	$14,080.00

b)
GENERAL JOURNAL
Date	Description	Debit	Credit
Sep.30	Cash	$178
	Accounts Payable		$178
	(To correct the error by company)
Sep.30	Cash	$2,772
	Note Receivable		$2,640
	Interest Receivable		$132
	(To record the collection of note with interest)
Sep.30	Bank Service Charges	$88
	Cash		$88
	(To record the service charges)
Sep.30	Accounts Receivable	$1,232
	Cash		$1,232
	(To reclassify NSF check as an account receivable)