Question

Daisy Company received a bank statement for February, as follows:

Date	Checks		Deposits		Balance
Feb.
1					$ 4,524.80
7	$ 2,700.33		$8,642.61
9	3,484.81
14	6.00	SC	460.00	CM
16	274.09
21	4,133.60		3,385.49
23	69.69	NSF
28					$ 6,344.38

SC = Service Charge; NSF - Check Returned; CM = Credit Memo; DM = Debit Memo

The receipt of $460 on February 14 was for a $445 note collected by the bank, plus $20 current interest, minus a $5 service charge (Miscellaneous expense). The company’s accounting records contained the following information:

Cash balance on February 28 from the books: $2,610.42

Cash Disbursements		Cash Receipts
Ck No.
155	$2,700.33	Feb. 7	$8,624.61
156	3,484.81	21	3,385.49
157	274.09
158	589.02
159	4,133.60
160	2,742.63

Note: All receipts are verified and correct.

	Required:
1.	Prepare a bank reconciliation on February 28, 2016, for Daisy.
2.	Prepare the journal entries that Daisy should record as a result of the reconciliation.

Chart of Accounts

CHART OF ACCOUNTS
Daisy 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 910 Income Tax Expense

Amount Descriptions

Amount Descriptions

Outstanding ck158

Outstanding ck160

Adjusted cash balance

Bank service charge (Miscellaneous expense)

Error in deposit

Note collected by bank, net

NSF check

General Journal

Prepare the journal entries that Daisy should record on February 28 as a result of the reconciliation. Additional Instruction

PAGE 6

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3
4
5
6
7

Bank Reconciliation

Prepare a bank reconciliation for Daisy on February 28, 2016. Additional Instructions

Daisy Company

Bank Reconciliation

February 28, 2016

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

Answer 1