Question

Blaze Co. deposits all cash receipts on the day when they are received and makes all cash payments by check. At the close of business on December 31, its Cash account shows a debit balance of $8,649. The company’s bank statement as of December 31 shows an ending cash balance of $17,151. The following information was also available. Outstanding checks as of December 31 total $4,476. Included with the bank statement was a debit memo in the amount of $250 for service charges. Check No. 4619, listed with the canceled checks, was correctly drawn for $820 in payment of a utility bill on December 16. The company mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $880. A credit memorandum indicates that the bank collected $8,000 from a customer's notes receivable on behalf of Blaze. The bank charged Blaze $50 for this collection service. The December 31 cash receipts of $1,470 were placed in the bank’s night depository after banking hours and were not recorded on the December 31 bank statement. The bank deducted $2,264 for an NSF check from a customer deposited on December 10. Create a cash/bank reconciliation for Blaze Co. Also provide any necessary adjusting journal entries resulting from the cash/bank reconciliation.

Answer 1

Particulars	Amount
Balance as per Cash Book	8649
Add:-
Check issued but not cleared	4476
Amount collected but not recorded	8000
Excess amount wrongly recorded for utility(880-820)	60
Less:-
Unrecorded service charges	-250
Unrecorded collection service charges	-50
Cash deposited but not recorded by bank	-1470
NSF Check	-2264
Balance as per Bank	17151

	Particulars	Debit	Credit
1.	Cash a/c	8000
	To Notes receivable a/c		8000
	(amount collected from customer's notes receivable)
2.	Cash a/c(880-820)	60
	To Utilities expense a/c		60
	(Correction of excess amount debited to utilities a/c)
3.	Bank charges a/c	250
	To Cash a/c		250
	(Service charges being recorded)
4.	Bank Charges a/c	50
	To Cash a/c		50
	(Collection charges being recorded)
5.	Customer a/c	2264
	To Cash a/c		2264
	(being check of customer returned due to insufficient funds)