In: Accounting
The following data pertain to bank transactions of Hawks Company during September:
- The company's bank statement showed a balance of $50,000 on September 30.
- The balance per book is as of September 30 was $49,000.
- Deposits in transit: $8,000.
- Outstanding checks: $5,000.
- The bank collected a note for the company amounted $5,500 in which $5,000 was principal and $500 was interest. The bank deposited $5,400 to the company account after charging $100 collection fee.
- The bank service charge for the month: $200.
- Included in the bank statement was a check from a customer in the amount of $1,200 which was marked NSF by the bank.
Instructions:
A. Prepare a Bank Reconciliation for the company on September 30.
B. Prepare any necessary journal entries for Hawk for its bank reconciliation.
Solution A:
Bank Reconciliation Statement | |
Sep-30 | |
Balance as Per Bank Statement | $50,000 |
Add: Deposits in transit | $8,000 |
$58,000 | |
Less: Outstanding Checks | $5,000 |
Adjusted Bank Balance | $53,000 |
Balance as per books | $49,000 |
Add: Collection of Note and interest (Less charges) | $5,400 |
$54,400 | |
Less: Bank service charges | $200 |
Less: NSF check | $1,200 |
Adjusted Balance per books | $53,000 |
Solution B:
Date | Account title | Debit | Credit |
30-Sep | Cash | 5400 | |
Collection Fee | 100 | ||
Note Receivable | 5000 | ||
Interest Revenue | 500 | ||
(To record Note collection) | |||
30-Sep | Miscellaneous expenses | 200 | |
Cash | 200 | ||
(To record bank service charges) | |||
30-Sep | Accounts Receivable | 1200 | |
Cash | 1200 | ||
(To record NSF check) |