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This information relates to the Cash account in the ledger of Cullumber Company.           Balance September 1—$20,340;...

This information relates to the Cash account in the ledger of Cullumber Company.

          Balance September 1—$20,340; Cash deposited—$64,000
          Balance September 30—$21,540; Checks written—$62,800

The September bank statement shows a balance of $20,440 at September 30 and the following memoranda.

Credits

Debits

Collection from customer of electronic funds transfer

 $2,460

NSF check: H. Kane

 $1,190

Interest earned on checking account

 65

Safety deposit box rent

 80


At September 30, deposits in transit were $5,388 and outstanding checks totaled $3,033.

1. Prepare the bank reconciliation at September 30, 2022. (List items that increase balance as per bank & books first.)

2. Prepare the adjusting entries at September 30, assuming the NSF check was from a customer on account. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Solutions

Expert Solution

Cullumber Company
Bank Reconciliation
Sep. 30
Bank Statement Balance      20,440 Book Balance      21,540
Add: Add:
Deposit in Transit         5,388 EFT Collected         2,460
Interest Revenue               65
Deduct: Deduct:
SERVICE CHARGE               80
Outstanding Checks         3,033
NSF Check         1,190
Adjusted Bank Balance      22,795 Adjusted Book Balance      22,795
Journal Entries
General Journal Debit Credit
Sep. 30 CASH         2,460
    Note Receivable         2,460
(To record note receivable)
Sep. 30 CASH               65
    Interest Revenue               65
(To record interest revenue)
Sep. 30 Accounts Receivable         1,190
     Cash         1,190
(To record NSF Check)
Sep. 30 Bank Charges               80
     Cash               80
(To record bank charges)

ekkarill92 answered 1 year ago
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