On November 30, 2001, Dr. Smith had a balance of $6,502.88 in his Cash Ledger account....

On November 30, 2001, Dr. Smith had a balance of $6,502.88 in his Cash Ledger account. On that date the bank statement indicated a balance of $8,243.75. Comparison of returned checks and bank memoranda revealed the following:

1. Deposits in transit November 30 amounted to $3,407.

2. Outstanding checks at November 30 totaled $2,140.37.

3. The Bank erroneously changed a $950 check of the Barkley Company against Dr. Smith's Bank account.

4. Bank service charges for November amounted to $20.00.

5. The bank collected a note for Dr. Smith for $3,750 plus interest of $250.

6. Included with the returned checks is a memo indicating that J. Martin's (a patient) check for $882 has been returned NSF (bounced)

7. Dr. Smith recorded a $95.50 check (it cleared for $95.50) for supplies as $955.

REQUIRED:

A. Prepare a bank reconciliation for Dr. Smith.

B. Journalize the necessary entires in journal form.

Expert Solution

Bank Reconciliation Statement
Balance as per Bank Stataement	8243.75
Add: Deposit in transit	3407.00
Add: Error for charging check	950.00
Subtotals	12600.75
Less: Outstanding Checks	2140.37
Adjusted Balance as per Bank Statement	10460.38

Balance as per Books	6502.88
Add: Notes receivbale collected	4000.00
Add: Error of recording check for supplies	859.50
Subtotals	11362.38
Less: Sevice charges	20.00
Less: NSF check	882.00
Adjusted balance as per Books	10460.38

Journal entries:
Cash account Dr.	4000.00
Notes receivable Account		3750
Interest revenue		250

Cash account Account	859.50
Supplies		859.5

Accounts receivable Account Dr.	882.00
Cash account		882

Misc. expense Account Dr.	20.00
Cash account		20

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