Textbook Problem

Brief Exercise 4-27 Bank Reconciliation

Hula Corp. utilizes J.P. Morgan Chase in its banking transactions. For the month of August, 2019, J. p. Morgan Chase presented Hula with its bank statement as follows:

Balance, August 31 , 2019 $64,900

Service charge for August 100

Interest earned during August 875

NSF check from Jeffrey Corp. (deposited by Hula) 450

Note ($11,000 and interest ($425) collected for Hula from a customer 11,425

Upon receiving the bank statement, Hula’s accountants analyzed its cash transactions for possible reconciling items between its cash balance per books and J.P. Morgan Chase’s cash balance:

Checking account balance per Hula’s books $53,453

Outstanding checks as of August 31 3,700

Deposit in transit at August 31 3,940

Error in recording check 9288 issued by Hula 63

The correct amount of check 9288 is $770. It was recorded as a cash disbursement of $707 by mistake. The check was issued to pay for merchandise purchases. The check appeared on the bank statement correctly.

Required:

Prepare a bank reconciliation schedule at August 31, 2019, in proper form.