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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

Solutions

Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

BANK RECONCILIATION AND RELATED JOURNAL ENTRIES The book balance in the checking account of Tori’s Health Center as of April 30 is $4,690.30. The bank statement shows an ending balance of $3,275.60. By examining last month’s bank reconciliation, comparing the deposits and checks written per books and per bank in April, and noting the service charges and other debit and credit memos shown on the bank statement, the following were found:

  1. (a) An ATM withdrawal of $200 on April 20 by Tori for personal use was not recorded on the books.
  2. (b) A bank debit memo issued for an NSF check from a customer of $29.10.
  3. (c) A bank credit memo issued for interest of $28 earned during the month.
  4. (d) On April 30, a deposit of $1,592 was made, which is not shown on the bank statement.
  5. (e) A bank debit memo issued for $24.50 for bank service charges.
  6. (f) Checks No. 481, 493, and 494 for the amounts of $215, $71, and $24.30, respectively, were written during April but have not yet been received by the bank.
  7. (g) The reconciliation from the previous month showed outstanding checks totaling $418.25. One of these checks, No. 397 for $38.60, has not yet been received by the bank.
  8. (h) Check No. 422 written to a creditor in the amount of $217.90 was recorded in the books as $271.90.

Required

  1. 1. Prepare a bank reconciliation as of April 30.
  2. 2. Prepare the required journal entries.

1.

To determine

Prepare bank reconciliation as of April 30.

Explanation

Bank reconciliation:

Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books.

Prepare bank reconciliation as of April 30.

Health center T
Bank Reconciliation
30-Apr
ParticularsAmount in $Amount in $
Balance per bank statement, April 30 3,275.60
 Add: Deposits in transit 1,592.00
  4,867.60
 Less: Outstanding checks  
No. 39738.60 
No...

2.

To determine

Prepare journal entry to record the given bank transactions.

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