Question

Problem 1:

The bank reconciliation for Weez Ltd as at 31 October 2017 was as follows.

WEEZ Ltd Bank Reconciliation 31 October 2017
Cash balance per bank Add: Deposits in transit					$	12 444.70   1 530.20
						13 974.90
Less: Outstanding cheques
Cheque number		Cheque amount
2451 2470 2471 2472 2474		$	1 260.40 720.10 844.50 503.60 1 050.00			4 378.60
Cash balance per the General Ledger					$	9 596.30

The November bank statement had a balance of $17 069.40 and revealed the following cheques and deposits:

	Bank statement
	Cheques										Deposits
	Date		Cheque number				Amount				Date				Amount
	1/11 2/11 5/11 4/11 8/11 10/11 15/11 18/11 27/11 30/11 29/11			2470 2471 2474 2475 2476 2477 2479 2480 2481 2483 2486			$	720.10 844.50 1 050.00 1 640.70 2 830.00 600.00 1 750.00 1 330.00 695.40 575.50    900.00				1/11 4/11 8/11 13/11 18/11 21/11 25/11 28/11 30/11			$	1 530.20 1 211.60 990.10 2 575.00 1 472.70 2 945.00 2 567.30 1 650.00   1 186.00
												Total			$	16 127.90
				Total			$	12 936.20

The cash records for Weez Ltd for November showed a general ledger balance of $10 846.90 and the following summaries of cash payments and receipts:

Date	Cheque number			Amount		Date		Cheque number		Amount
1/11 2/11 2/11 4/11 8/11 10/11 15/11 18/11		2475 2476 2477 2478 2479 2480 2481 2482		$	1 640.70 2 830.00 600.00 538.20 1 570.00 1 330.00 695.40 612.00		20/11 22/11 23/11 24/11 29/11 30/11		2483 2484 2485 2486 2487 2488			$ 575.50 829.50 974.80 900.00 398.00   1 200.00
							Total					$ 14 694.10

Date	Amount
3/11 7/11 12/11 17/11 20/11 24/11 27/11 29/11 30/11		$ 1 211.60 990.10 2 575.00 1 472.70 2 954.00 2 567.30 1 650.00 1 186.00   1 338.00
Total		15 944.70

Additional Information:

The bank statement contained the following direct debit and credit memoranda:

A credit of $1 505.00 for the collection of a $1 400 note for Weez Ltd plus interest of $120 and less a collection fee of $15. On October 31, 2017, with an adjusting journal entry, Weez Ltd had accrued $100 interest on the note.

A debit for the printing of additional company cheques $72.00.

A debit for an NSF cheque for $130. The company immediately called the customer and was assured that the cheque would now clear. As a result, the cheque was redeposited on 30/11 and is included in the $1 338.00 Cash Receipts above.  

Cheque #2479 was a cash payment for equipment. The company’s records are correct.

The cash receipt dated 20/11 was from a large cash sale of merchandise. The company’s records are incorrect.

Required:

(a)     In the general journal, prepare the required entries based on your review of the above data. Assume immediate posting of these journal entries, as well as the updating of the Cash GL account—you are not required to prepare the posting. Ignore GST.

(b)     Prepare a bank reconciliation as at 30 November, beginning with Balance per Bank Statement.

Answer 1

	Accounts Title	Dr	Cr
30-Nov	Cash	$1,505
	Miscelleneous expense	15
	Notes Receivable		1400
	Interest Revenue		20
	Interest receivable		100
30-Nov	Miscelleneous expense	$72
	Cash		$72
30-Nov	Sales Revenue	$9
	Cash		$9
	Bank Reconciliation
	November 30 2018
	Company's Book
	Book balance		10846.9
	Add
	Proceeds of note less collection charge	1505	1505
			12351.9
	Deductions
	Error (2954-1945)	9
	Printing charges	72	81
	Adjusted Book balance		12270.9
	Bank statement
	Bank statement Balance		17069.4
	Additions:   Deposit of November	$1,338
	Add: Bank error (1750-1570)	180	1518
	Deductions		$18,587
	Check No 2451	1260.4
	Check No 2472	503.6
	Check No 2478	538.2
	Check no 2482	612
	Check no 2484	829.5
	Check no 2485	974.8
	Check no 2487	398
	Check no 2488	1200
			6316.5
	Adjusted Bank Balance		$12,270.90