Question

Bank Reconciliation The bank reconciliation made by Sandler Company, a sole proprietorship, on March 31 showed:

Deposit in transit of		$1,320
Outstanding checks	no.797	$540
	no.804	$1,068
The reconciled cash balance on March 31 was		$14,064

The following bank statement is available for April 2012.

Bank Statement
TO		Sandler Company											April 30
		Fairbanks, AK						FAIRBANKS NATIONAL BANK
Date		Deposits		No.		Date		Charges			Date		Balance
Apr.	1	$1,320		804		Apr.	2	$1,068			Mar.	31	$14,352
	3	2,016		807			3	876			Apr.	1	15,672
	7	1,500		808			7	1,368				2	14,604
	13	1,224		809			7	1,006				3	15,744
	18	1,008		810			16	1,248				7	14,870
	23	948		811			13	391				13	15,703
	27	1,608		813			27	648				16	14,455
	30	1,392		814			23	720				18	14,863
	30 IN	72		NSF			18	600				23	15,091
				SC			30	48				27	16,051
												30	17,467
Item codes		EC: Error Correction				DM: Debit Memo					CM: Credit Memo
		SC: Service Charge				OD: Overdraft					RT: Returned Item
		IN: Interest Earned				NSF: Non-sufficient Funds

A list of deposits made and checks written during April is shown below:

Deposits Made				Checks Written
Apr.	2	$2,016		No.	807	$876
	6	1,500			808	1,368
	10	1,224			809	1,006
	17	1,008			810	1,248
	22	948			811	326
	24	1,608			812	1,138
	29	1,392			813	648
	30	1,710			814	720
		$11,406			815	446
					816	1,050
						$8,826

The Cash in Bank account balance on April 30 was $16,644. In reviewing checks returned by the bank, the accountant discovered that check No. 811 written for $391 for delivery expense, was recorded in the cash disbursements journal as $326. The NSF check for $600 was that of customer R. Koppa, deposited in April.

Required
a. Prepare a bank reconciliation for Sandler Company at April 30.
b. Prepare the necessary journal entries to bring the Cash in Bank account into agreement with the reconciled cash balance on the bank reconciliation.

a.

SANDLER COMPANY Bank Reconciliation April 30
AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance			$Answer	AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance		$Answer
AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance			Answer	AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance		Answer
			Answer			Answer
Less: Outstanding checks (list in numerical order)				Less: NSF Check R. Koppa	Answer
	Check no.	Amount
	Answer	Answer		AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance	Answer
	Answer	Answer		Error in recording
	Answer	Answer		Check No. 811	Answer
	Answer	Answer	Answer			Answer
AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance			$Answer	AnswerEnding Balance from Bank StatementBalance from General LedgerAdd: Deposits not credited by bankAdd: Interest EarnedService chargeReconciled Cash Balance		$Answer

b.

General Journal
Date		Description	Debit	Credit
April	30	AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income	$Answer	$Answer
		AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income	Answer	Answer
		To record interest earned on bank account for April.
	30	AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income	Answer	Answer
		AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income	Answer	Answer
		To reclassify NSF check as an accounts receivable.
	30	AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income	Answer	Answer
		AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income	Answer	Answer
		To record bank service charge.
	30	AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income	Answer	Answer
		AnswerAccounts ReceivableAdvertising ExpenseCash in BankMiscellaneous ExpenseDelivery ExpenseInterest Income	Answer	Answer
		To correct error in recording check 811.