Problem 7-6A Bank service and credit card charges for the month were $6. (a) Pre
ID: 2572947 • Letter: P
Question
Problem 7-6A
Bank service and credit card charges for the month were $6.
(a) Prepare the bank reconciliation at October 31. (List items that increase balance as per bank & books first.
(b)Prepare any journal entries required from the reconciliation. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.
Problem 7-6A
When Blossom Holdings Ltd. received its bank statement for the month of October, it showed that the company had a cash balance of $16,413 as at October 31. Blossom’s general ledger showed a cash balance of $20,050 at that date. A comparison of the bank statement and the accounting records revealed the following information: 1.Bank service and credit card charges for the month were $6.
.2. A cheque, in the amount of $620, from one of Blossom’s customers that had been deposited during the last week of October was returned with the bank statement as “NSF.” 3. Cheque #3421, which was a payment for utilities expenses, had been correctly written for $860 but had been incorrectly recorded in the general ledger as $680. 4. Blossom had written and mailed out cheques with a value of $2,860 that had not yet cleared the bank account. 5. During the month, the bank collected a $1,100 note receivable plus the outstanding interest of $99 on behalf of Blossom. The interest had already been accrued. 6. The cash receipts for October 31 amounted to $6,890 and had been deposited in the night drop slot at the bank on the evening of October 31. These were not reflected on the bank statement for October.Explanation / Answer
2.Cheque paid but entered incorrectly
1. BANK CHARGES A/C
4. NO ENTRY
PARTICULARS MINUS ITEMS PLUS ITEMS Balance as per pass book of blossom holdings ltd.(bank statement) 16413 1.Cheque deposited but returned by bank - 6202.Cheque paid but entered incorrectly
- 180 3.Bank service and credit card charges - 6 4.Cheques paid but not cleared 2860 - 5.Bank collected payments and interest on behalf of blossom holdings ltd. 1199 - 6.Cash receipts deposited but on shown in bank statement - 6890 balance as per cash book of blossom holding ltd. - 20050