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Bank Reconciliation Journal Entries

Question Description
Bank Reconciliation

Don Wyatt is unable to reconcile the bank balance at January 31. Don’s reconciliation is

as follows:

Cash balance per bank

$ 3,560.20

Add: NSF check


Less: Bank service fee


Adj. balance per bank

$ 4,025.20

Cash balance per books

$ 3,875.20

Less: Deposits in transit


Add: Outstanding checks


Adj. balance per books

$ 4,075.20

(a) Prepare a correct bank reconciliation. The above one is incorrect.

(b) Prepare the journal entries required by the bank reconciliation.

P8-3A Bank Reconciliation

On May 31, 2018, Reber Co. had a cash balance per books of $ 6,781.50. The bank

statement from New York State Bank on that date showed a balance of $6,404.60.

The following transactions occurred during the month:

1) There was a bank service fee of $40 for printing checks.

2) Cash sales of $836.15 on May 12 were deposited to the bank. The company made a

mistake and the company made an entry on their records for $886.15. The bank records

were correctly entered for the deposit.

3) Outstanding checks at May 31 totaled $ 576.25. Deposits in transit were $ 2,416.15

4) On May 18, the company issued check No. 1181 for $685 to Lynda Carsen on

account. The check, which cleared the bank in May was incorrectly journalized and

posted in the company records as $658.

5) A $3,000 note receivable was collected by the bank for Reber Co. on May 31, plus

$80 interest. The bank charged a collection fee of $ 20. No interest has been accrued on

the note.

6) Included with the cancelled checks was a check issued by Stiner Company to Ted

Cress for $800 that was incorrectly charged to Reber Company by the bank. (Bank got

mixed up and deducted this amount from the Reber’s checking account in error.)

7) On May 31, the bank statement showed an NSF charge of $680 for a check issued by

Sue Allison, a customer, to Reber Co. on account.

Prepared the bank reconciliation at May 31, 2018.

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