Answered: Bank Reconciliation The bank…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Bank Reconciliation The bank reconciliation made by Winton, Inc., on August 31 showed:

Deposit in transit of		$1,280
Outstanding checks	no.597	$830
	no.603	$640
The reconciled cash balance on August 31 was		$14,110

The following bank statement is available for September:

Bank Statement
TO		Winton, Inc.		September 30
		St. Louis, MO		STATE BANK
Date	Deposits	No.		Date	Charges		Date	Balance
Sept.	1	$1,280	597		Sept.	1	$830		Aug.	31	$14,300
	2	1,120	607			5	1,850		Sept.	1	14,750
	5	850	608			5	1,100			2	15,870
	9	744	609			9	552			5	13,770
	15	1,360	610			8	640			8	13,130
	17	1,540	611			17	488			9	13,322
	25	1,028	612			15	674			15	14,008
	30	680	614			25	920			17	15,060
			NSF			29	1,028			25	15,168
			SC			30	36			29	14,140
										30	14,784
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 September is shown below:

Deposits Made		Checks Written
Sept.	1	$1,120	No.	607	$1,850
	4	850		608	1,100
	8	744		609	552
	12	1,360		610	640
	16	1,540		611	488
	24	1,028		612	746
	29	680		613	310
	30	1,266		614	920
		$8,588		615	386
				616	420
					$7,412

The Cash in Bank account balance on September 30 was $15,286. In reviewing checks returned by the bank, the accountant discovered that check No. 612 written for $674 for advertising expense, was recorded in the cash disbursements journal as $746. The NSF check written for $1,028, which Winton deposited on September 24, was a payment on account from customer D. Walker.

Required
a. Prepare a bank reconciliation for Winton, Inc., at September 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.

Bank reconciliation
Journal entries

WINTON, INC. Bank Reconciliation September 30
Answer	Answer	Answer	Answer
Answer	Answer	Add: Check No. 612 for	Answer
	Answer	recorded as	Answer	Answer
	Answer
Less: Outstanding checks (list in numerical order)		Less: NSF Check of D. Walker	Answer
	Check no.	Amount
	603	Answer		Answer	Answer	Answer
	Answer	Answer
	Answer	Answer
	Answer	Answer	Answer
Answer	Answer	Answer	Answer

General Journal
Date	Description	Debit	Credit
Sept	30	Answer	Answer	Answer
		Answer	Answer	Answer
		To correct error in recording check 612.
	30	Answer	Answer	Answer
		Answer	Answer	Answer
		To reclassify NSF check as an accounts receivable.
	30	Answer	Answer	Answer
		Answer	Answer	Answer
		To record bank service charge.

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