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Bank Reconciliation and Adjusting Entries

See the attached Excel.

Given info:
The bank portion of the bank reconciliation for Money Money Company at October
31, 2006 was as follows.

Money Money Company
Bank Reconciliation
October 31,2006

Cash balance per bank $12,444.70
Add: Deposits in transit 1,530.20
13,974.90

Less: Outstanding checks

Check Number Check Amount
2451 1,260.40
2470 720.10
2471 844.50
2472 503.60
2474 1,050.00 4,378.60

Adjusted cash balance per bank 9,596.30

The adjusted cash balance per bank agreed with the cash balance per books at October 31.
The November bank statement showed the following checks and deposits:

Bank Statement

Checks Deposits
Date Number Amount Date Amount
11-1 2470 $720.10 11-1 $1,530.20
11-2 2471 844.50 11-4 1,211.60
11-5 2474 1,050.00 11-8 990.10
11-4 2475 1,640.70 11-13 2,575.00
11-8 2476 2,830.00 11-18 1,472.70
11-10 2477 600.00 11-21 2,945.00
11-15 2479 1,750.00 11-25 2,567.30
11-18 2480 1,330.00 11-28 1,650.00
11-27 2481 695.40 11-30 1,186.00
11-30 2483 575.50
11-29 2486 900.00 Total $16,127.90

Total $12,936.20

The cash records per books for November showed the following.

Cash Receipts
Cash Payments Journal Journal
Date Number Amount Date Number Amount Date Amount
11-1 2475 $1,640.70 11-20 2483 575.50 11-3 $1,211.60
11-2 2476 2,830.00 11-22 2484 829.50 11-7 990.10
11-2 2477 600.00 11-23 2485 974.80 11-12 2,575.00
11-4 2478 538.20 11-24 2486 900.00 11-17 1,472.70
11-8 2479 1,570.00 11-29 2487 398.00 11-20 2,954.00
11-10 2480 1,330.00 11-30 2488 1,200.00 11-24 2,567.30
11-15 2481 695.40 11-27 1,650.00
11-18 2482 612.00 Total $14,694.10 11-29 1,186.00
11-30 1,338.00

Total $15,944.70

The bank statement contained two bank memoranda:
1. A credit of $1,505 for the collection of a $1,400 note for Mooney Company plus interest of $120 and less a collection fee of $15. Mooney Company has not accrued any interest on the note.

2. A debit for the printing of additional company checks $72.

At November 30, the cash balance per books was $10,846.90, and the cash balance per the bank statement was $17,069.40. The bank did not make any errors, but two errors were made by Money Money Company.

Instructions:
(a) Using the four steps in the reconciliation procedure described on pages 354-355 in the 5th ed., prepare a bank reconciliation at November 30. (EXAMPLE FROM THOSE PAGES IS AT VERY BOTTOM)

MONEY MONEY COMPANY
Bank Reconciliation
Novemeber 30, 2006

Balance per bank statement
Add:
-
Less:

-

Adjusted cash balance per bank $-

Balance per books
Add:
$0.00
Less:

0.00

Adjusted cash balance per books $0.00

(b) Prepare the adjusting entries based on the reconciliation. (Hint: The correction of any errors pertaining to recording checks should be made to Accounts Payable. The correction of
any errors relating to recording cash receipts should be made to Accounts Receivable).

Date DR CR
Nov. 30

Example from pages 354-55 mentioned above:

"The bank statement for Laird Company shows a balance per bank of $15,907.45 on April 30, 2006. On this date the balance
of cash per books is $11,589.45. From the foregoing steps, the following reconciling
items are determined.
1. Deposits in transit: April 30 deposit (received by bank on
May 1). $2,201.40
2. Outstanding checks: No. 453, $3,000.00; no. 457, $1,401.30;
no. 460, $1,502.70. 5,904.00
3. Errors: Check no. 443 was correctly written by Laird for
$1,226.00 and was correctly paid by the bank. However, it was
recorded for $1,262.00 by Laird Company. 36.00
4. Bank memoranda:
a. Debit?NSF check from J. R. Baron for $425.60 425.60
b. Debit?Printing company checks charge $30.00 30.00
c. Credit?Collection of note receivable for $1,000 plus interest
earned $50, less bank collection fee $15.00 1,035.00"

W.A. Laird Company
Bank Reconciliation
30-Apr-06

Cash balance per bank statement 15,907.45
Add: Deposits in Transit 2,201.40
18,108.85

Less:Outstanding Checks
No. 453 3,000.00
No. 457 1,401.60
No. 460 1,502.70 5,904.00
Adjusted Cash balance per bank 12,204.85

Cash balance per books 11,589.45
Add:collection of note rec $1,000, plus
interest earned $50, less coll fee $15 1,035.00
Error in recording Ch # 443 36.00 1,071.00
12,660.45
Less NSF check 425.60
Bank Serv. Chg 30.00 455.60
Adjusted cash balance per books 12,204.85

Attachments

Solution Preview

Please see the attached file.

Given info:
The bank portion of the bank reconciliation for Money Money Company at October
31, 2006 was as follows.

Money Money Company
Bank Reconciliation
October 31,2006

Cash balance per bank $12,444.70
Add: Deposits in transit 1,530.20
13,974.90

Less: Outstanding checks

Check Number Check Amount
2451 1,260.40
2470 720.10
2471 844.50
2472 503.60
2474 1,050.00 4,378.60

Adjusted cash balance per bank 9,596.30

The adjusted cash balance per bank agreed with the cash balance per books at October 31.
The November bank statement showed the following checks and deposits:

Bank Statement

Checks Deposits
Date Number Amount Date Amount
11-1 2470 $720.10 11-1 $1,530.20
11-2 2471 844.50 11-4 1,211.60
11-5 2474 1,050.00 11-8 990.10
11-4 2475 1,640.70 11-13 2,575.00
11-8 2476 2,830.00 11-18 1,472.70
11-10 2477 600.00 11-21 2,945.00
11-15 2479 1,750.00 11-25 2,567.30
11-18 2480 ...

Solution Summary

The solution has the bank reconciliation for Money Money Company and the related journal entries

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