Question

The following information is available for the Turner Company for the month of March:

a.   On March 31, after all transactions have been recorded, the balance in the company's Cash account has a balance of $17,635.

b.   The company's bank statement shows a balance on March 31 of $35,052.

c.   Outstanding checks at March 31 include check #2748 in the amount of $3,975 and check #2753 in the amount of $5,667.

d. Examination of the checks on the bank statement with the entries in the accounting records reveals that check #2732 for the payment of an account payable was correctly written for $5,375, but was recorded in the accounting records as $5,735.

e.   A debit memo included with the bank statement shows a $1,550 NSF check from a customer, C. Trainum.

f.   A credit memo included with the bank statement indicates that the bank collected $15,000 on a noninterest-bearing note receivable for Martin. The bank deducted a $25 collection fee, and credited the remainder of $14,975 to Martin's account.

g.   A deposit made late in the afternnoon of March 31 totaled $5,965, and did not appear on the bank statement.

h.   Included with the bank statement was a debit memorandum in the amount of $45 for bank service charges. It has not been recorded on the company's books.

1. Prepare the March bank reconciliation for the Roberts Company.

2. Based on the bank reconciliation prepared for Requirement 1, prepare the general journal entries Roberts must make at March 31.

Use the templates below for your answers.

Bank Reconciliation
March 31
Bank Statement Balance				Book Balance
Add:				Add:
Less:
				Less:
Adjusted bank balance, October 31				Adjusted book balance, October 31
GENERAL JOURNAL
Accounts	Debits	Credits

Answer 1

Solution 1:

Turner Company
Bank Reconciliation - March 31
Bank's Cash balance		Company's cash balance
Particulars	Amount	Particulars	Amount
Ending balance as per Bank Statements	$35,052.00	Ending Balance as per cash books	$17,635.00
Additions:		Additions:
Outstanding cash receipt	$5,965.00	Incorrect recording of check no 2732 ($5,735 -$5,375)	$360.00
		Collection of notes receivables	$14,975.00
Deductions:		Deductions:
Outstanding Checks ($3,975 + $5,667)	$9,642.00	NSF Cheque	$1,550.00
		Service Charge	$45.00
Up to date cash balance as per bank	$31,375.00	Up to date cash balance as per books	$31,375.00

Solution 2:

Journal Entries - Turner Company
S. No.	Particulars	Debit	Credit
1	Cash Dr	$360.00
	To Accounts Payable		$360.00
	(Being incorrect recording of check now corrected)
2	Cash A/c Dr	$14,975.00
	Service Charges Dr	$25.00
	To Notes Receivables		$15,000.00
	(Being collection of notes receivables by bank)
3	Accounts receivables Dr	$1,550.00
	To Cash		$1,550.00
	(Being check dishonoured by bank)
4	Service Charges Dr	$45.00
	To Bank		$45.00
	(Being bank charges debited by bank)