Question

Prepare bank reconciliation and adjustments. This information relates to the Cash account in the ledger of Howard Company. Balance September 1 - $16,400; Cash deposited - $64,000 Balance September 30 - $17,600; Checks written - $62,800 The September bank statement shows a balance of $16,500 at September 30 and the following memoranda. Credits Debits Collection of electronic funds transfer $1,830 NSF checks: H. Kane $560 Interest earned on checking account 45 Safety deposit box rent 60 At September 30, deposits in transit were $4,738 and outstanding checks totaled $2,383. Instructions (a) Prepare the bank reconciliation at September 30, 2017. (b) Prepare a tabular analysis for the adjustments at September 30, assuming the NSF check was from a customer on account. Use the following column headings: Cash, Accounts Receivable, Revenues, and Expenses. Include margin explanations for the changes in revenues and expenses. NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

Answer 1

Answer:

Bank Reconciliation Statement:

It is a statement that is used to adjust the accounting entries to account for the differences in accounts statement and Bank statement. This includes adjusting entries as well.

Cash account balance at September 1 $16,400

Add: Cash deposited during September $64,000

Less: Checks written ($62,800)

Cash account balance at September 30 $17,600

Bank Reconciliation Statement of Howard Company as at September 30

Cash account balance as at September 30  $17,600

Add:  

Outstanding checks $2,383  

Collection of electronic fund transfer by the bank $1,830  

Interest earned $45  

$4,258

Less:  

Deposits in transit $4,738  

NSF check $560  

Kne safety deposit box rent $60  

(5,358)

Cash balance as per bank statement  $16,500

Adjusting entries of Howard Co. as at September 30

Entry No.1

Cash $1,830  

Accounts Receivable  $1,830

(Electronic fund transfer received by the bank)  

Entry No. 2

Cash $45  

Interest Revenue  $45

(Interest earned)  

Entry No. 3

Accounts Receivable $560  

Cash  $560

(Check returned from a customer as NSF)  

Entry No. 4

Bank Charges $60  

Cash  $60

(Safety deposit box rent)