National Surf Board Co. (NSB) gathered the following information for its August 31 bank reconciliation: Cash...

National Surf Board Co. (NSB) gathered the following information for its August 31 bank reconciliation:

Cash balance per books, August 31 $3,872
Cash balance per bank, August 31 $ (332) (account is overdrawn; a negative balance)

August 31st cash receipts of $8,000 were locked in NSB’s Treasurer’s office with a plan to deposit them at the bank the next day.

Outstanding cheques issued by NSB at August 31st totalled $4,023

A check originally issued by a customer for $257 was returned by NSB’s bank.

The bank statement showed the bank assessed interest charges of $15 on August 31 which have not been recorded by NSB.

The bank statement showed special charges of $35 which had been properly recorded by NSB.

NSB’s Check #101 to pay for supplies was incorrectly processed by NSB’s bank as $205; it was correctly entered as $250 in NSB’s books.

1) Prepare the bank reconciliation for August 31. (5 Marks)

2) Prepare any necessary journal entries that NSB has to make to update its accounting records. (2 Marks)

Expert Solution

Requirement:1

National Surf Board Co.
Bank Reconciliation Statement
As on August 31
Cash balance according to bank statement		$ (332.00)
Add:
Depoosit in transit	$ 8,000.00	$ 8,000.00
Deduct:
Outstanding Checks	$ (4,023.00)
Bank Errors overstated the bank balance [250-205]	$ (45.00)	$ (4,068.00)
Adjusted cash balance per bank		$ 3,600.00


Cash balance according to company`s records		$ 3,872.00
Add:

Deduct:
Interest Charges	$ (15.00)
Check Returned by Bank	$ (257.00)	$ (272.00)

Adjusted cash balance per books		$ 3,600.00

Requirement:2

Date	Account Tiltes and Explanation	Debit	Credit
August. 31	Account Receivables	$ 257.00
	Cash		$ 257.00
	(To record customer check returned by the bank )

August. 31	Interest Charges	$ 15.00
	Cash		$ 15.00
	(To record interest charges charged by bank)

No need to record any other transactions

ekkarill92 answered 2 years ago

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