In: Accounting
We Chat Ltd has Cash at Bank balance as per the company’s record of $10,665 debit as at 29th 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 29th February based on the provided information.
b. Prepare the necessary adjusting entries as at 29th February 2020
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) |