Stewart Recording Studio, owned by Ron Stewart, showed the following bank reconciliation at March 31: Stewart Recording Studio Bank Reconciliation March 31, 2020 Bank statement balance $ 22,200 Book balance $ 31,085 Add: Deposit of March 31 in transit 10,045 $ 32,245 Deduct: Outstanding cheques: #14 $ 843 #22 317 1,160 Adjusted bank balance $ 31,085 Adjusted book balance $ 31,085 Cash Acct. No. 101 Date Explanation PR Debit Credit Balance 2020 March 31 Balance 31,085 April 30 CR17 71,762 102,847 30 CD13 92,000 10,847 A list of deposits made and cheques written during April, taken from the Cash Receipts Journal and Cash Disbursements Journal, is shown below: Deposits Made April 7 $ 693 13 4,620 18 5,926 23 13,961 27 1,758 30 44,804 Total April Cash Receipts $ 71,762 Cheques Written No. 23 $ 5,223 24 3,164 25 944 26 313 27 4,271 28 4,900 29 19,818 30 41,440 31 416 32 11,511 Total April Cash Disbursements $ 92,000 The following bank statement is available for April: Bank Statement To: Stewart Recording Studio April 30, 2020 Bank of Canada Cheques/Charges Deposits/Credits Balance 22,200 #31 04/03 416 04/03 10,045 31,829 #28 04/07 9,400 04/07 693 23,122 #26 04/13 313 04/13 4,620 27,429 NSF 04/18 14,337 04/18 5,926 19,018 #24 04/23 3,164 04/23 13,961 29,815 #23 04/27 5,223 04/27 1,758 26,350 #29 04/30 19,818 04/30 121,000 127,532 PMT 04/30 16,052 111,480 INT 04/30 498 110,982 SC 04/30 177 110,805 NSF = Not Sufficient Funds SC = Service Charge PMT = Payment of Principal on the loan INT = Interest on Bank Loan In reviewing cheques returned by the bank, the bookkeeper discovered that cheque #28, for delivery expense, was recorded in the Cash Disbursements Journal correctly as $4,900. The NSF cheque for $14,337 was that of customer Oprah Winney, deposited in March. On the bank statement, the payment for $16,052 is regarding a note payable. There is also a deposit of $121,000 dated April 30. It is an investment made by the owner into the business (the bank transferred the funds electronically from the owner’s personal account to his business account, which is why it was not recorded in the Cash Receipts Journal). 1. Record to reinstate customer account (April 30) 2. Record the April Bank service charges (April 30) 3. Record the April Interest expense (April 30) Image attached for reference

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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Stewart Recording Studio, owned by Ron Stewart, showed the following bank reconciliation at March 31:
 

Stewart Recording Studio  
Bank Reconciliation  
March 31, 2020  
Bank statement balance       $ 22,200 Book balance $ 31,085  
Add:                  
Deposit of March 31 in transit         10,045        
        $ 32,245        
Deduct:                  
Outstanding cheques:                  
#14 $ 843              
#22   317     1,160        
Adjusted bank balance       $ 31,085 Adjusted book balance $ 31,085  
 

 

Cash Acct. No. 101
Date   Explanation PR Debit   Credit Balance  
2020                
March 31   Balance         31,085  
April 30     CR17 71,762     102,847  
  30     CD13     92,000 10,847  
 


A list of deposits made and cheques written during April, taken from the Cash Receipts Journal and Cash Disbursements Journal, is shown below:
 

Deposits Made  
April 7   $ 693  
  13     4,620  
  18     5,926  
  23     13,961  
  27     1,758  
  30     44,804  
Total April Cash Receipts $ 71,762  
 

 

Cheques Written  
No. 23   $ 5,223  
  24     3,164  
  25     944  
  26     313  
  27     4,271  
  28     4,900  
  29     19,818  
  30     41,440  
  31     416  
  32     11,511  
Total April Cash Disbursements $ 92,000  
 


The following bank statement is available for April:
 

Bank Statement    
To: Stewart Recording Studio   April 30, 2020
Bank of Canada
 
Cheques/Charges   Deposits/Credits   Balance    
                  22,200    
#31 04/03   416     04/03 10,045   31,829    
#28 04/07   9,400     04/07 693   23,122    
#26 04/13   313     04/13 4,620   27,429    
NSF 04/18   14,337     04/18 5,926   19,018    
#24 04/23   3,164     04/23 13,961   29,815    
#23 04/27   5,223     04/27 1,758   26,350    
#29 04/30   19,818     04/30 121,000   127,532    
PMT 04/30   16,052           111,480    
INT 04/30   498           110,982    
SC 04/30   177           110,805    
NSF = Not Sufficient
Funds
SC = Service
Charge
  PMT = Payment of
Principal on
the loan
  INT = Interest
on Bank
Loan
 
 

 

  • In reviewing cheques returned by the bank, the bookkeeper discovered that cheque #28, for delivery expense, was recorded in the Cash Disbursements Journal correctly as $4,900.
  • The NSF cheque for $14,337 was that of customer Oprah Winney, deposited in March.
  • On the bank statement, the payment for $16,052 is regarding a note payable. 
  • There is also a deposit of $121,000 dated April 30. It is an investment made by the owner into the business (the bank transferred the funds electronically from the owner’s personal account to his business account, which is why it was not recorded in the Cash Receipts Journal).

1. Record to reinstate customer account (April 30)

2. Record the April Bank service charges (April 30)

3. Record the April Interest expense (April 30) 

Image attached for reference 

Date
General Journal
Debit
Credit
Apr 30
Transcribed Image Text:Date General Journal Debit Credit Apr 30
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