Question

On May 31, 2017, Reber Company had a cash balance per books of $7,001.50. The bank statement from New York State Bank on that date showed a balance of $6,624.60. A comparison of the statement with the cash account revealed the following facts. 1. The statement included a debit memo of $49.00 for the printing of additional company checks. 2. Cash sales of $731.00 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit slip were incorrectly made for $781.00. The bank credited Reber Company for the correct amount. 3. Outstanding checks at May 31 totaled $805.25. Deposits in transit were $2,636.15. 4. On May 18, the company issued check No. 1181 for $695 to Lynda Carsen on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Reber Company for $659. 5. A $3,220.00 note receivable was collected by the bank for Reber Company on May 31 plus $89.00 interest. The bank charged a collection fee of $29.00. No interest has been accrued on the note. 6. Included with the cancelled checks was a check issued by Stiner Company to Ted Cress for $1,020.00 that was incorrectly charged to Reber Company by the bank. 7. On May 31, the bank statement showed an NSF charge of $671.00 for a check issued by Sue Allison, a customer, to Reber Company on account. Prepare the bank reconciliation at May 31, 2017. (Round answers to 2 decimal places, e.g. 52.75. List items that increase cash balance first. Reconcile cash balance per bank first.) REBER COMPANY Bank Reconciliation May 31, 2017 $ : $ : $ $ : : $ $ SHOW LIST OF ACCOUNTS Prepare the necessary adjusting entries for Reber Company at May 31, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Enter answers to 2 decimal places, e.g. 15.25. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit May 31 (To record note receivable.) (To record NSF check.) (To record error in deposit.) (To record error on check.) (To record check printing charge.) Click if you would like to Show Work for this question: Open Show Work

Answer 1

SOLUTION

1. Bank reconciliation statement

Particulars	Amount ($)	Amount ($)
Cash balance per bank statement		6,624.60
Add: Deposit in transit	2,636.15
Bank error : Stiner company check	1,020	3,656.15
		10,280.75
Less: Outstanding checks		(805.25)
Adjusted cash balance per bank		9,475.50
Cash balance per books		7,001.50
Add: Collection of note receivable (3,220+89-29)		3,280
		10,281.50
Less: NSF check	671
Error in May 12 deposit (781-731)	50
Error in recording check No. 1181 (695-659)	36
Check. Printing charge	49	(806)
Adjusted cash balance per books		9,475.50

2. Journal entries-

S.No.	Account titles and Explanation	Debit ($)	Credit ($)
1.	Cash	3,280
	Miscellaneous expense	29
	Notes receivable		3,220
	Interest revenue		89
	(To record the collection of the note)
2.	Account receivable	671
	Cash		671
	(To record NSF check)
3.	Sales revenue	50
	Cash		50
	(To record error in deposit)
4.	Account payable	36
	Cash		36
	(To record error on check)
5.	Miscellaneous expense	49
	Cash		49
	(To record check printing charge)