Oscar’s Red Carpet Store maintains a checking account with Academy Bank. Oscar’s sells carpet each day but makes bank deposits o
nly once per week. The following provides information from the company’s cash ledger for the month ending February 28, 2021.
Date Amount No. Date Amount
Deposits: 2/4 $ 2,350 Checks: 321 2/2 $ 4,350
2/11 1,950 322 2/8 650
2/18 2,850 323 2/12 2,150
2/25 3,750 324 2/19 1,850
Cash receipts: 2/26-2/28 1,250 325 2/27 450
$ 12,150 326 2/28 950
327 2/28 1,550
Balance on February 1 $ 6,450 $ 11,950
Receipts 12,150
Disbursements (11,950)
Balance on February 28 $ 6,650
Information from February's bank statement and company records reveals the following additional information:
The ending cash balance recorded in the bank statement is $10,665.
Cash receipts of $1,250 from 2/26–2/28 are outstanding.
Checks 325 and 327 are outstanding.
The deposit on 2/11 includes a customer's check for $450 that did not clear the bank (NSF check).
Check 323 was written for $2,800 for advertising in February. The bank properly recorded the check for this amount.
An automatic withdrawal for Oscar's February rent was made on February 4 for $1,200.
Oscar's checking account earns interest based on the average daily balance. The amount of interest earned for February is $165.
In January, one of Oscar's suppliers, Titanic Fabrics, borrowed $5,300 from Oscar. On February 24, Titanic paid $5,500 ($5,300 borrowed amount plus $200 interest) directly to Academy Bank in payment for January's borrowing.
Academy Bank charged service fees of $100 to Oscar’s for the month.
Required:
1. Prepare a bank reconciliation for Oscar's checking account on February 28, 2021. (Amounts to be deducted should be indicated with a minus sign. Total entries to the same account together when entering in the bank reconciliation.)
2. Record the necessary cash adjustments. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Total entries to the same account together when entering in the journal entry worksheet.)
