Question

Bank Reconciliation and Entries

The cash account for Collegiate Sports Co. on November 1, 20Y9, indicated a balance of $81,145. During November, the total cash deposited was $293,150, and checks written totaled $307,360. The bank statement indicated a balance of $112,675 on November 30, 20Y9. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:

1. Checks outstanding totaled $41,840.
2. A deposit of $12,200, representing receipts of November 30, had been made too late to appear on the bank statement.
3. A check for $7,250 had been incorrectly charged by the bank as $2,750.
4. A check for $760 returned with the statement had been recorded by Collegiate Sports Co. as $7,600. The check was for the payment of an obligation to Ramirez Co. on account.
5. The bank had collected for Collegiate Sports Co. $7,385 on a note left for collection. The face of the note was $7,000.
6. Bank service charges for November amounted to $125.
7. A check for $2,500 from Hallen Academy was returned by the bank because of insufficient funds.

Required:

1. Prepare a bank reconciliation as of November 30, 20Y9.

Collegiate Sports Co.
Bank Reconciliation
November 30, 20Y9
Cash balance according to bank statement		$
	$
Total deductions
Adjusted balance		$
Cash balance according to company's records		$
	$
Total additions
	$
Total deductions
Adjusted balance		$

2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. If an amount box does not require an entry, leave it blank.

20Y9 Nov. 30
Nov. 30

3. If a balance sheet were prepared for Collegiate Sports Co. on November 30, 20Y9, what amount should be reported as cash?
$

Answer 1

1.

Collegiate Sports Co.
Bank Reconciliation Statement
Nov-30
Balance as Per Bank Statement		$1,12,675
Add: deposit of November 30, not recorded by bank		$12,200
		$1,24,875
Less: Outstanding Checks	$41,840
Less: bank error in charging check as $2,750 instead of $7,250	$4,500	$46,340
Adjusted Bank Balance		$78,535
Balance as per books (81145+293150-307360)		$66,935
Add: error in recording check as $7,600 instead of $760	$6,840
Add: note and interest collected by bank	$7,385	$14,225
		$81,160
Less: Bank service charges	$125
Less: check returned because of insufficient funds	$2,500	$2,625
Adjusted Balance per books		$78,535

2.

Date	Account title	Debit	Credit
a. Nov 30	Cash	14225
	Accounts Payable-Ramirez Co.		6840
	Note Receivable		7000
	Interest receivable		385
b. Nov 30	Accounts Receivable-Hallen Academy	2500
	Miscellaneous expenses	125
	Cash		2625

3.

Cash balance = $78,535