Required Prepare a bank reconciliation to the correct balanc

Required:    Prepare a bank reconciliation to the correct balance in cash.

                        Prepare any necessary journal entries for Jack Company.

Use the following information to prepare a bank reconciliation for Jack Company at April 30, 2016:

Cash account balance, April 30, $19,572.80.

Bank statement balance, April 30, $21,516.40.

Service charge on bank statement not recorded in books, $140.00.

Deposits in transit, $2,877.20.

Outstanding checks, April 30, $1,893.60.

The bank statement included a charge of $932.80 for A. Parish’s NSF check. The check, returned with the bank statement, had been received by Jack in payment on account.

The bank collected a $4,000.00 note in April for Jack. This amount was included in the bank statement, but Jack had not yet recorded the collection. The bank’s $140.00 service charge for April [see (3) above] included collection charge for the note.

Solution

Bank Reconciliation Statement: Balance as per Bank Statement 21516.4 Balance as per Books 19572.8 Addtions: Additions: Deposits in transit 2877.2 Collection of Notes receivable 4000 Subtotals 24393.6 Subtotals 23572.8 Deductions: Deductions: Outstanding checks 1893.6 Service charges 140 NSF check 932.8 Adjusted balance as per bank statement 22500 Adjusted balance as per Books 22500 Journal entries: Acounts title and explanations Debit $ Credit $ Cash account Dr. 4000     Notes receivable 4000 Misc. expense Account Dr. 140       Cash account 140 Accounts receivable Account Dr. 932.8       Cash account 932.8