The Odum Corporation’s cash account showed a balance of $17,198 on March 31, 2007. The bank...

The Odum Corporation’s cash account showed a balance of $17,198 on March 31, 2007. The bank statement balance for the same date indicated a balance of $17,924.55. The following additional information is available concerning Odum’s cash balance on March 31, 2007.

1. Undeposited cash on hand on March 31 amounted to $724.50.

2. A customer’s NSF check for $173.80 was returned with the bank statement.

3. A note for $2,000 plus interest of $25 was collected for Odum by the bank during March. The bank notified Odum of this collection on the bank statement.

4. The bank service charge for March was $15.

5. A deposit of $951.75 mailed to the bank on March 31 did not appear on the bank statement.

6. The following checks mailed to creditors had not been processed by the bank on March 31:

#429 $ 57.40 #433 $214.80

#432 $147.50 #434 $191.90

7. A customer check for $149.50 in payment of his account and listed correctly for that amount on the bank statement had been incorrectly recorded on the accounting records as $194.50.

Required

1. Prepare a bank reconciliation for the Odum Corporation for March 31, 2007.

2. Prepare any adjusting journal entries necessary to record the information from Requirement 1.

Solutions

Expert Solution

Bank Reconciliation:

Bank
Balance as per Bank Statement as on Mar 31, 2016	$17924.55
Add: Cash yet to be deposited in bank on 31/3/16	724.50
Add: Deposit in transit	951.75
	19600.80
Less: Outstanding Checks	-611.60
Adjusted Balance as per Bank Statement =	$18989.20

Books
Balance as per Cash Book as on Mar 31, 2016	$17198.00
Add: Notes principle collected by bank	2000.00
Add: Note interest collected by bank	25.00
	19223.00
Less: NSF check received	-173.80
Less: Bank charges	-15
Less: Excess deposits recorded in books	-45
Adjusted Balance as per Cash Book	$18989.20

Journal entries in the company's books:

Date	Accounts Titles	Debit $	Credit $
2007
Mar 31	Accounts Receivable	173.80
	Cash		173.80

	Cash	2025
	Note Receivable		2000
	Interest on Note receivable		25

	Bank Charges	15
	Cash		15

	Accounts Receivable	45
	Cash		45
	(excess deposit recorded in books)

ekkarill92 answered 1 year ago

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