Question

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.

Answer 1

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)