Question

The following data pertaining to the cash transactions and bank account of Kim Company for September, Year 4, are available to you:
Cash balance per accounting records , Sep 30 Year 4                                                  Sh67,500
Cash balance per accounting bank statement, Sep 30 Year 4                                       308,383
Bank service charge for September                                                                                       1,100
Debit memo for printed cheques delivered by the bank                                                       300
Deposit of Sep 30 not recorded by bank until Oct 1                                                          48,700
Outstanding cheques, Sep 30, Year 4                                                                                   81,283
Proceeds of a bank loan on Sep 30 not recorded in the accounting records
( interest payable on maturity)                                                                                            300,000
Proceeds from Note Receivable , principal amount sh8,000                                              8,100
Cheque no 1012 to a creditor entered in the accounting records as sh 18,791;
Deducted in the bank statement in the correct amount                                                   17,891
Stolen cheque lacking an authorized signature deducted from Kim’s account in
Error                                                                                                                                            86,700
Cheque from a debtor returned by the bank marked NSF                                               12,600

Required:
Prepare a bank reconciliation as at September 30, Year 4
Prepare journal entry(ies) to adjust the accounting records

Answer 1

1.

KIM COMPANY
Bank Reconciliation
Sep 30, Year 4
Cash balance per bank statement		$ 308,383	Cash balance per accounting records		$    67,500
Additions:			Additions:
Deposit in transit	$ 48,700		Receipt of bank loan	$ 300,000
Bank error	$ 86,700		Proceeds from note receivable	$      8,100
		$ 135,400	Error in recording of check# 1012 ($18,791-$17,891)	$          900
					$ 309,000
			Deduct:
			NSF Check	$    12,600
			Bank Service charges	$      1,100
Deduct:Outstanding checks		$    81,283	Check printing charges	300
					$    14,000
Adjusted bank balance		$ 362,500	Adjusted book balance		$ 362,500

Date	Title	Debit	Credit
Sep-30	Cash	$ 300,000
	Bank loan payable		$ 300,000
	(To record receipt of loan)
Sep-30	Cash	$      8,100
	Note receivable		100
	Interest revenue		$      8,000
	(To record receipt of note with interest)
Sep-30	Cash	$          900
	Accounts payable		$          900
	(To correct error in recording of check# 1012)
Sep-30	Accounts receivable	$    12,600
	Cash		$    12,600
	(To record NSF Check)
Sep-30	Misc. expenses	$      1,400
	Cash		$      1,400
	(To record bank service charges and check printing charges)

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