Question

In: Accounting

The following data pertain to bank transactions of Hawks Company during September: - The company's bank...

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.

Solutions

Expert Solution

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)

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