Question

In: Accounting

2. On Nov 30, 2016 Sammy’s Smith Shop Inc. had the following Cash in Bank of...

2. On Nov 30, 2016 Sammy’s Smith Shop Inc. had the following Cash in Bank of $15,450. The Bank Statement showed an ending Balance of $18,750 at Nov30 , 2019. Comparisons of Book to Bank revealed the following Reconciling items: a. Outstanding Checks $6,740 b. $18 Bank Service fee c. The Bank transferred a $1,200 check into Sammy’s Smith Shop but it should have deposited it into Sammy’s Ship Shop d. NSF check of $1,600 was received from Sammy’s customer Renata was reported on the bank statement e. The bank collected a $4,550 Note Receivable, plus interest of $750 less a collection fee of $250 f. Sammy recorded recorded a deposit from Cash sales of $8,250 as $13,072 g. Deposits in Transit: $3,250 Required: a. Prepare a Bank Reconciliation b. Record the adjusting journal entries c. What is the Ending Balance in Devin’s Cash Ledger at Nov 30st 2019?

Solutions

Expert Solution

Sammy's Smith Shop Inc
Bank Reconciliation
Nov 30, 2019
Cash Balance as per bank statement $ 18,750
Add: Deposit in transit $    3,250
Deduct:
Outstanding checks $ 6,740
Bank error in recording of deposit $ 1,200 $    7,940
Adjusted bank balance $ 14,060
Cash balance per books $ 15,450
Add: Electronic transfer collected by bank (4550+750-250) $    5,050
Deduct:
Bank service charges $        18
NSF Check $ 1,600
Error in recording of deposit ($13,072-$8,250) $ 4,822 $    6,440
Adjusted book balance $ 14,060
Cash $ 5,050
Bank charges / Misc. expenses $     250
Accounts receivable $ 4,550
Interest revenue $     750
(To record collection of note)
Accounts receivable $ 1,600
Cash $ 1,600
(To record NSF Checks)
Bank charges / Misc. expenses $        18
Cash $        18
(To record bank service charges)
Cash sales   $ 4,822
Cash $ 4,822
(To correct error in recording of cash sales)

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ekkarill92 answered 2 years ago
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