Question

Broadway Enterprises has received its bank statement as at March 31, 2019 which showed a balance of $15,180. Meanwhile its Cash book balance at March 31, 2019 stood $8,140.

In addition, the Accountant of Broadway Enterprises was presented with the following information:

1. Bank charges for the month were shown as $250 as per bank statement.
2. Cheques issued to two creditors-Alloy Limited for $900 (cheque #253) and Ben Lion for $270 (cheque #258) were not presented to the bank and remain outstanding.
3. Ali Brown, a customer deposited a cheque in the amount of $2,500 directly into Broadway Enterprises’ bank account that was not recorded in the cash book.
4. Proceeds of a matured Note receivable was received by the bank in the amount of $5,800, including interest of $800.
5. A cheque in the amount of $180 received from a customer, Barry Duke was returned by the bank marked as Not Sufficient Funds.
6. The bank erroneously posted a cheque in the amount of $2,000 (cheque #1123) issued by Broadway Limited in Broadway Enterprises’ account.
7. During the evening of March 31, a deposit of $2,000 was placed in the night deposit box at the bank after closing hours; this is not shown on the bank statement.

You are required to:

1. Prepare the relevant journal entries; and
2. Prepare the Bank Reconciliation Statement for Broadway Enterprises as at March 31, 2019.

Answer 1

Solution a:

Journal Entries - Broadway Enterprises
Date	Particulars	Debit	Credit
31-Mar	Cash Dr	$2,500.00
	To Account receivables		$2,500.00
	(To record collection of receivables)
31-Mar	Cash Dr	$5,800.00
	To Note receivables		$5,000.00
	To Interest revenue		$800.00
	(To record note collection by bank)
31-Mar	Miscellenaeous expense Dr	$250.00
	To Cash		$250.00
	(Being service charge debited by bank)
31-Mar	Accounts receivables Dr	$180.00
	To Cash		$180.00
	(To record NSF check from customer)

Solution b:

Broadway Enterprises
Bank Reconciliation - March 31
Bank's Cash balance		Company's cash balance
Particulars	Amount	Particulars	Amount
Ending balance as per Bank Statements	$15,180.00	Ending Balance as per cash books	$8,140.00
Additions:		Additions:
Outstanding Deposits	$2,000.00	Bank collection	$2,500.00
		Note collection (including interest)	$5,800.00
Deductions:		Deductions:
Outstanding Checks	$1,170.00	Service Charge	$250.00
		NSF Cheque	$180.00
Up to date cash balance as per bank	$16,010.00	Up to date cash balance as per books	$16,010.00