PA52 Preparing a Bank Reconciliation and Journal Entries and

PA5-2 Preparing a Bank Reconciliation and Journal Entries and Reporting Cash LO 5-4, LO 5-5] [The following information applies to the questions displayed below.] The bookkeeper at Martin Company has asked you to prepare a bank reconciliation as of May 31. The May 31 bank statement and the May T-account for cash (summarized). Martin Company\'s bank reconciliation at the end of April showed a cash balance of $17,900. No deposits were in transit at the end of April, but a deposit was in transit at the end of May. BANK STATEMENT Checks Deposits Other Balance, May 1 May 2 May 5 May 7 May 8 May 14 May 17 May 22 May 27 May 31 Balance, May 31 Balance $ 17,900 24,900 14,900 9,300 18,300 17,820 $ 110 17,930 260 17,670 13,270 70 13,200 13,200 7,000 #301 $10,000 #302 5,600 9,000 #303 480 Interest NSF check #304 4,400 Service charge Cash (A) May1 May 1 May 7 May 29 17,900 7,000 9,000 5,600 Balance 10,000 5,600 480 4,400 1,100 #301 May 2 #302 May 4 #303 May 11 #304 May 23 #305 May 29 May 31 Balance 17,920

Solution

Bank Statement: Company\'s Books Ending balance per bank statement 13200 Ending balance per Cash account 17920 Additions: Additions: Deposit in transit 5600 Interest earned 110 5600 110 18800 18030 Deductions: Deductions: Outstanding checks 1100 NSF check 260 Bank service charges 70 1100 330 Up-to-date cash balance 17700 Up-to-date cash balance 17700 2 Cash 110      Interest revenue 110 Accounts receivable 260         Cash 260 Bank service charge expense 70         Cash 70