Question

Brown Company's bank statement for september 30 showed a cash balance of $1,350. The company's cash account in its general ledger showed a $995 debit balance. The following information was also available as of september 30. a. A $125 debit memoranda is included with the bank statement and dealt with a customer's check for $100 marked NSF and returned to Brown Company by the bank. In addition, the bank charged Browns company a $25 processing fee. b. The september 30 cash receipts, $1250 were placed in the banks night depository after banking hours on that date and this amount did not appear on the September 30 bank statement. c. A $15 debit memorandum for checks printed was included with the cancelled checks. d. Outstanding checks amounted $1,145 e. A customer's note for $900 was collected by the bank. A collection fee of $25 was deducted by the bank and the difference was deposited in Brown's account. f. Included with the canceled checks was a check for $275 written by another company that was erroneously deducted from Browns Company's account.

Required:

1. Prepare a bank reconciliation as of September 30.

2. Prepare any necessary adjusting journal entries necessary as a result of the bank reconciliation.

Answer 1

Ques 1
BROWN COMPANY
Bank Reconciliation
Sep-30
Bank Statement Balance	$1,350	Book Cash Balance	$995
Add:		Add:
Deposit of 9/30	1,250	Proceeds of note less    collection fee	875
Bank error	275
	$2,875		$1,870
Deduct:		Deduct:
Outstanding checks	1,145	NSF check processing fee	125
		Bank service charge	15
Adjusted Bank Balance	$1,730	Adjusted Book Balance	$1,730
Ques 2
Account titles	Debit	Credit
Cash	875
Service Charge Expense	25
Notes Receivable		900
Accounts Receivable	100
Service Charge Expense	25
Cash		125
Service Charge Expense	15
Cash		15