ACCTG 1 Lecture Notes - Lecture 27: General Ledger, Bank Reconciliation
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The balance in Happ, Inc.âs general ledger Cash account was$14,300 at September 30, before reconciliation. The September 30balance shown in the bank statement was $12,830. Reconciling itemsincluded deposits in transit, $1,370; bank service charges, $155;NSF check written by a customer and returned with the bankstatement, $620; outstanding checks, $550; and interest credited tothe account during September but not recorded on the companyâsbooks, $125.
Required:
Prepare a bank reconciliation as of September 30 for Happ,Inc.
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The bank reconciliation prepared by Gemma Tours on March 31,2017, appeared as follows:
| Gemma Tours | ||||
| Bank Reconciliation | ||||
| March 31, 2017 | ||||
| Bank statementbalance | $15,500 | Book balance | $34,257 | |
| Add: | ||||
| Deposit of March 31 in transit | 22,044 | |||
| $37,544 | ||||
| Deduct: | ||||
| Outstanding cheques: | ||||
| #79 | $1,306 | |||
| #84 | 1,981 | 3,287 | ||
| Adjusted bankbalance | $34,257 | Adjusted bookbalance | $34,257 | |
The Cash account in the General Ledger appeared as follows on April30:
| Cash | Acct. No.101 | ||||
| Date | Explanation | PR | Debit | Credit | Balance |
| 2017 | |||||
| March 31 | Balance | 34,257.00 | |||
| April 30 | CR11 | 35,645.00 | 69,902.00 | ||
| 30 | CD14 | 45,533.00 | 24,369.00 | ||
A list of deposits made and cheques written during April, takenfrom the Cash Receipts Journal and Cash Disbursements Journal, isshown below:
| Deposits Made | |
| April 7 | $14,865.00 |
| 13 | 892.00 |
| 18 | 14,272.00 |
| 23 | 994.00 |
| 27 | 1,981.00 |
| 30 | 2,641.00 |
| Total April CashReceipts | $35,645.00 |
| Cheques Written | |
| No.91 | $ 1,256 |
| 92 | 5,475 |
| 93 | 2,590 |
| 94 | 3,613 |
| 95 | 3,033 |
| 96 | 1,895 |
| 97 | 8,862 |
| 98 | 3,033 |
| 99 | 8,982 |
| 100 | 6,794 |
| Total April CashDisbursements | $45,533 |
The following bank statement is available for April: (Note: Thebank deposits interest into the bank account at the end of everymonth.)
| Bank Statement | |||||
| To:Gemma Tours | April 30, 2017 Bank of Montreal | ||||
| Cheques/Charges | Deposits/Credits | Balance | |||
| 15,500 | |||||
| #93 | 04/02 | 2,509 | 04/03 | 22,044 | 35,035 |
| #92 | 04/07 | 5,475 | 04/07 | 14,865 | 44,425 |
| #84 | 04/13 | 1,981 | 04/13 | 892 | 43,336 |
| NSF | 04/18 | 6,876 | 04/18 | 14,272 | 50,732 |
| #95 | 04/23 | 3,033 | 04/23 | 994 | 48,693 |
| #99 | 04/27 | 8,982 | 04/27 | 1,981 | 41,692 |
| #96 | 04/30 | 1,895 | 04/30 | 2,641 | 42,438 |
| #97 | 04/30 | 8,862 | INT | 46 | 33,622 |
| #94 | 04/30 | 3,613 | 30,009 | ||
| PMT | 04/30 | 9,861 | 20,148 | ||
| INT | 04/30 | 35 | 20,113 | ||
| SC | 04/30 | 55 | 20,058 | ||
| NSF = NotSufficient Funds | SC =Service Charge | PMT =Principal Payment | INT =Interest | ||
In reviewing cheques returned by the bank, the bookkeeperdiscovered that cheque #93, for delivery expense, was recorded inthe Cash Disbursements Journal incorrectly as $2,590. The NSFcheque was that of customer Laura Clark, deposited in April.
Required:
a. Prepare a bank reconciliation at April 30.
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b. Prepare the necessary journal entries tobring the General Ledger Cash account into agreement with theadjusted balance on the bank reconciliation.
Journal entry worksheet
Record interest earned.
Note: Enter debits before credits.
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Journal entry worksheet
Record to account for error in Cheque #93.
Note: Enter debits before credits.
Journal entry worksheet Record to reinstate customer account. Note: Enter debits before credits.
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The bank reconciliation prepared by Gatz Company on May 31,2017, appeared as follows:
| GATZ COMPANY | |||||
| Bank Reconciliation | |||||
| May 31, 2017 | |||||
| Bank statementbalance | $9,264.35 | Book balance | $19,429.00 | ||
| Add: | |||||
| Deposit of May 31 in transit | 949.00 | ||||
| $10,213.35 | |||||
| Deduct: | Deduct: | ||||
| Outstanding cheques: | NSF cheque plusservice | ||||
| #876 | $636.00 | charge | $11,530.65 | ||
| #882 | 1,744.00 | 2,380.00 | Bank servicecharge | 65.00 | 11,595.65 |
| Adjusted bankbalance | $7,833.35 | Adjusted bookbalance | $7,833.35 | ||
The Cash account in the General Ledger appeared as follows on June30 (Gatz uses only a General Journal to recordtransactions):
| Cash | Acct. No.101 | ||||
| Date | Explanation | PR | Debit | Credit | Balance |
| 2017 | |||||
| May 31 | Balance | 7,833.35 | |||
| June 1 | Cheque #883 | GJ16 | 1,847.00 | 5,986.35 | |
| 1 | Cheque #884 | GJ16 | 107.00 | 5,879.35 | |
| 3 | Cheque #885 | GJ16 | 618.00 | 5,261.35 | |
| 4 | Cheque #886 | GJ16 | 1,917.00 | 3,344.35 | |
| 9 | Deposit | GJ16 | 4,579.00 | 7,923.35 | |
| 12 | Cheque #887 | GJ16 | 425.15 | 7,498.20 | |
| 12 | Cheque #888 | GJ16 | 3,138.00 | 4,360.20 | |
| 12 | Cheque #889 | GJ16 | 936.00 | 3,424.20 | |
| 18 | Deposit | GJ16 | 3,879.00 | 7,303.20 | |
| 20 | Cheque #890 | GJ16 | 2,537.00 | 4,766.20 | |
| 21 | Cheque #891 | GJ16 | 1,406.24 | 3,359.96 | |
| 24 | Cheque #892 | GJ16 | 2,492.00 | 867.96 | |
| 26 | Cheque #893 | GJ16 | 71.00 | 796.96 | |
| 29 | Deposit | GJ16 | 1,745.00 | 2,541.96 | |
The following bank statement is available for June:
| Bank Statement | |||||
| To: GatzCompany | June 30, 2017 Bank of Montreal | ||||
| Cheques/Charges | Deposits/Credits | Balance | |||
| 05/31 | 9,264.35 | ||||
| #884 | 06/01 | 107.00 | 06/01 | 949.00 | 10,106.35 |
| #883 | 06/04 | 1,847.00 | 8,259.35 | ||
| #876 | 06/09 | 636.00 | 06/09 | 4,579.00 | 12,202.35 |
| #889 | 06/12 | 936.00 | 11,266.35 | ||
| #882 | 06/14 | 1,744.00 | 9,522.35 | ||
| #887 | 06/18 | 245.15 | 06/18 | 3,879.00 | 13,156.20 |
| #885 | 06/20 | 618.00 | 12,538.20 | ||
| #891 | 06/21 | 1,046.24 | 11,491.96 | ||
| #886 | 06/29 | 1,917.00 | 9,574.96 | ||
| SC | 06/30 | 72.00 | 06/30 | 9,502.96 | |
| NSF = Not Sufficient Funds | SC = Service Charge | PMT = Principal Payment | INT = Interest | ||
Required:
a. Prepare a bank reconciliation at June 30, 2017. Assumethat any errors made were by the book keeper (cheque #887 was foroffice supplies; cheque #891 was for utilities expense).(Round the final answers to the nearest cent.)
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b. Prepare the necessary entries resulting fromthe bank reconciliation.
Journal entry worksheet
Record to account for error in Cheque #887.
Note: Enter debits before credits.
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Journal entry worksheet
Record to account for error in Cheque #891.
Note: Enter debits before credits.
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Journal entry worksheet
Record bank service charges for June.
Note: Enter debits before credits.
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