Question

On March 31, 2019, Home Decorating Pavilion received a bank statement showing a balance of $9.720. The balance in the firm's checkbook and Cash account on the same date was $9.962. The difference between the two balances is caused by the items listed below a. A $2.845 deposit made on March 30 does not appear on the bank statement. b. Check 358 for $470 Issued on March 29 and Check 359 for $1,620 issued on March 30 have not yet been paid by the bank c. A credit memorandum shows that the bank has collected a $1.400 note receivable and interest of $140 for the firm. d. A service charge of $22 appears on the bank statement. e. A debit memorandum shows an NSF check for $510. (The check was issued by Dane Jaris, a credit customer) f. The firm's records indicate that Check 341 of March 1 was issued for $800 to pay the month's rent. However, the canceled check and the listing on the bank statement show that the actual amount of the check was $750. g. The bank made an error by deducting a check for $545 issued by another business from the balance of Home Decorating Pavilion's account. Required: 1. Prepare a bank reconciliation statement for the firm as of March 31, 2019. 2. Record entries for any items on the bank reconciliation statement that must be journalized. Complete this question by entering your answers in the tabs below. Required 1 Required 2

Answer 1

Home Decorating Pavilion
Bank Reconciliation Statement
March 31,2019
Balance on Bank statement						9,720
Addittions:
Deposit in transit					2,845
Check incorrectly charged to account					545
						3,390
						13,110
Deductions for oustanding checks
cheque #358					470
cheque #359					1,620
Total oustanding cheques						2,090
Adjusted bank balance						11,020
Balance in books						9,962
Addittions:
Error in recording cheque 341					50
Collection of note with interest					1540
						1590
						11,552
Deductions:
Service charge					22
NSF					510
						532
Adjusted book balance						11,020
Journal Entries
Date	General Journal				Debit	Credit
3/31/2019	Cash				1540
	note receivable					1,400
	interest income					140
3/31/2019	Cash				50
	Rent expense					50
3/31/2019	Service expense				22
	cash					22
3/31/2019	Accounts receivable				510
	cash					510