We Chat Ltd has Cash at Bank balance as per the company’s record of $10,665 debit...

We Chat Ltd has Cash at Bank balance as per the company’s record of $10,665 debit as at 29^th February 2020. The bank statement balance from Citigroup Bank showed a credit balance of $9,450. A comparison of the statement with the cash account revealed the following:

1. Unpresented cheques at 29 February totalled $5,405, and outstanding deposits were $6,900.

2. Included with the cheques paid was a cheque issued by Click and Go Ltd to M. Phelps for $450 that was incorrectly charged to We Chat Ltd by the bank.

3. The bank statement included a debit entry of $90 for the printing of additional company cheques.

4. Included on the bank statement was a credit entry of $820 indicating the collection of a note receivable for We Chat Ltd by the bank on 15 February

Required

a. Prepare a bank reconciliation at 29^th February based on the provided information.

b. Prepare the necessary adjusting entries as at 29^th February 2020

Solutions

Expert Solution

	Bank Reconciliation

Bal per Bank		$ 9,450
Add:	Cheque wrongly charged	$ 450
	Cheque Deposited but not credited	$ 6,900	$ 7,350
Less:
	Unpresented Cheque	$ 5,405	$ 5,405
Adjust Bal per Bank		$ 11,395


Bal per Book		$ 10,665
Add:
	Note credited in bank	$ 820	$ 820
Less:
	Cheque printing charges	$ 90	$ 90
Adjust Bal per Book		$ 11,395


Date	Journal Entry	Debit	Credit
	Bank	$ 820
	Notes Receivable		$ 820
	(Funds collected in bank)
	Cheque printing charges	$ 90
	Bank		$ 90
	(Service charges debited by bank)

ekkarill92 answered 1 year ago

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