Question

Miller Corporation’s December 31, 2016, bank statement showed a $2,049.25 balance. On this date, Miller’s Cash account reflected a $146.90 overdraft. In reconciling these amounts, the following information is discovered:

1.	Cash on hand for undeposited sales receipts, December 31, $130.25.
2.	Customer NSF check returned with bank statement, $419.20.
3.	Cash sales of $634.25 for the week ended December 18 were recorded on the books. The cashier reports this amount missing, and it was not deposited in the bank.
4.	Note receivable of $2,400.00 and interest of $24 collected by the bank and not recorded on the books.
5.	Deposit in transit December 31, $330.00.
6.	A customer check for $195.40 in payment of its account was recorded on the books at $945.10.
7.	Outstanding checks, $2,035.55. Includes a duplicate check of $70.85 to C. Brown, who notified Miller that the original was lost. Miller stopped payment on the original check and has already adjusted the cash account in the accounting records for this amount.

	Required:
1.	Prepare a December 31 bank reconciliation for Miller.
2.	Prepare any journal entries necessary by Miller to record the information from Requirement 1.

Chart of Accounts

CHART OF ACCOUNTS
Miller Corporation
General Ledger
ASSETS 111 Cash 121 Accounts Receivable 125 Notes Receivable 141 Inventory 152 Prepaid Insurance 181 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable EQUITY 311 Common Stock 331 Retained Earnings	REVENUE 411 Sales Revenue 431 Interest Income EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 632 Loss from Missing Deposit 910 Income Tax Expense

Amount Descriptions

Amount Descriptions
Adjusted cash balance
Cash on hand
Deposit in transit
Error in recording
Interest on note
Missing deposit
Note collected by bank
NSF check returned
Outstanding checks

General Journal

Prepare any adjusting journal entries necessary from the bank reconcilation on December 31. Additional Instructions

PAGE 12

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6

Bank Reconciliation

Prepare a December 31 bank reconciliation for Miller. Additional Instructions

Miller Corporation

Bank Reconciliation

December 31, 2016

1	Balance from bank statement
2	Add:
3
4
5
6
7	Deduct:
8
9	Adjusted cash balance
10
11	Balance from company records
12	Add:
13
14
15
16
17	Deduct:
18
19
20
21
22	Adjusted cash balance

Answer 1

Miller Company Bank Reconciliation
Balance from bank statement		$ 2,049.25
Add: Deposit in transit	$ 330
Add: Cash on hand	$ 130.25	$ 460.25
		$ 2,509.50
Less: Outstanding checks		($ 2,035.55)
Adjusted Cash balance		$ 473.95
Balance from company records		($ 146.90)
Add: Note Collected by bank	$ 2,400
Add: Interest on note	$ 24	$ 2,424
		$ 2,277.10
Deduct: Missing deposit	($ 634.25)
Deduct : Error in recording                   ( $ 945.10 (-) $ 195.40)	($ 749.70)
Deduct : NSF check returned	($ 419.20)	($ 1,803.15)
Adjusted Cash balance		$ 473.95

Date	Account Titles and Explanations	Debit (in $)	Credit (in $)
Dec-31	Accounts receivable - (Error)	$ 749.70
	Accounts receivable - (NSF check)	$ 419.20
	Loss from cash shortage - (Missing deposit)	$ 634.25
	Cash		$ 1,803.15
	(to record the accounts receivable )
Dec-31	Cash	$ 2,424
	Notes receivable		$ 2,400
	Interest revenue		$ 24
	(To record the Note )