Preparing a bank reconciliation Brett Knight Corporation operates four bowling a
ID: 2428000 • Letter: P
Question
Preparing a bank reconciliation
Brett Knight Corporation operates four bowling alleys. The business just received the October 31 bank statement from City National Bank, and the statement shows an ending balance of $905. Listed on the statement are an EFT rent collection of $410, a service charge of $10, NSF checks totaling $70 and a $30 charge for printed checks. In reviewing the cash records, the business identified outstanding checks totaling $450 and a deposit in transit of $1,775. During October, the business recorded a $310 check by debiting Salaries Expense and crediting Cash for $31. The business Cash account shows an October 31 balance of $2,209.
Requirements
Prepare the bank reconciliation at October 31.
Journalize any transactions required from the bank reconciliation.
Explanation / Answer
BANK RECONCILIATION STATEMENT
CASH A/C.........................................DR $410
TO RENT INCOME $410
CASH A/C.........................................DR $450
TO OUTSTANDING CHECKS 4450
SERVICE CHARGE A/C.............................DR $10
NSF CHECK A/C.......................................DR $70
CHARGE OF PRINTED CHECK.................DR $30
DEPOSIT IN TRANSIT A/C.......................DR $1775
TO CASH A/C $1885
SUSPENSE A/C...................................DR $279
TO CASH A/C $279
CASH BALANCE AS PER CASH ACCOUNT $2209 ADD EFT RENT COLLECTION $410 ADD OUTSTANDING CHECKS $450 LESS SERVICE CHARGE ($10) LESS NSF CHECKS ($70) LESS PRINTED CHECKS CHARGE ($30) LESS DEPOSIT IN TRANSIT ($1775) LESS WRONG RECORDING OF SALARIES EXPENSES ($279) BANK BANK BALANCE AS PER BANK STATEMENT $905