The journal entry for a note collected by the bank with interest requires a debit to Cash and a credit to both Note Receivable and Interest Revenue.
42) Outstanding cheques are added to the ending bank balance on the bank statement when preparing the bank reconciliation.
43) Bank charges are deducted from the ending bank balance in the general ledger when preparing the bank reconciliation.
44) In a bank reconciliation, adjustments to the bank balance always require preparation of journal entries.
45) What is a bank reconciliation? Why is it important to prepare a bank reconciliation every month when the bank statement is received from the bank?
46) Prepare a bank reconciliation dated December 31, 2010, for Welcome Inc. based on the following information.
?Balance per bank statement is $21,200.68.
?Balance per books is $20,559.40.
?The December bank statement indicated a service charge of $35.
?Cheque #1169 for $410.50 and cheque #1183 for $2,150.00 were not returned with the bank statement.
?The bank had not received a deposit in transit of $3,443.22 when the bank statement was generated.
?A bank debit memo indicated an NSF cheque written by Bill Broke to Welcome Inc. on December 11, 2010, for $169.
?A bank credit memo indicated a bank collection of $1,700 and interest revenue of $28 on December 15, 2010.
47) The following data have been gathered for Rocky Candi Corporation for the month ended September 30, 2011. Prepare a bank reconciliation based on the following information:
?The bank statement reveals a balance of $8,936.
?The September 30, 2011, book balance was $3,200.
?There was an EFT deposit of $1,800 on the bank statement for the monthly rent from a tenant.
?The bookkeeper had erroneously recorded a $50 cheque as $500. The cheque was to settle an account payable.
?The bank statement revealed $50 in service charges.
?Cheques #322 and #330 for $260 and $285 were not returned with the bank statement.
?A deposit made on September 29, 2007, for $1,250 did not appear on the bank statement.
?A deposit of $500 made on September 10 was erroneously credited to Rocky Candi's account by the bank for $5,000.
?A bank debit memo indicated an NSF cheque for $259.
48) Prepare a bank reconciliation for Living Life Company as of September 30, 2011, based on the following information. (Hint: you will need to compute Living Life Company's cash balance per books as of September 30, 2011 using the data below.)
?The balance per the September 30, 2011 bank statement is $27,419.55.
?Living Life Company's bookkeeper mistakenly recorded an $885.00 cash disbursement as $855.00.
?The bank mistakenly recorded a deposit of $3,000 made by Moral Company on September 10 as $300.
?The bank statement indicated bank service charges of $35.00 in September.
?Outstanding cheques as of September 30, 2011, amount to $6,400.10.
?Deposits in transit as of September 30, 2011, amount to $3,405.65.
49) Prepare any journal entries based on the following data regarding the bank reconciliation prepared by Corruption Company on July 31, 2011.
a.A customer's cheque for $260 was returned with the bank statement and stamped NSF.
b.Outstanding cheques amount to $650.
c.Service charges for July per bank statement are $25.
d.Cheque #925 for $3,250 for office equipment was erroneously recorded by the bookkeeper as $2,350.
e.The bank erroneously credited Corruption Company's account for a $575 deposit made by Bribe and Bilk Inc.
f.A deposit ticket correctly prepared for $695 appeared on the bank statement as a deposit for $965.
g.Cheque #930 for $900 for rent expense was erroneously recorded by the bookkeeper as $90.
50) Prepare a bank reconciliation for Big Blue Company for November 30 2011 using the following information:
?The balance per the November 30, 2011 bank statement is $35,416.65
?The bookkeeper mistakenly recorded an $225.00 cash disbursement as $255.00.
?The bank mistakenly recorded a deposit of $8,000 made by Big Blue Company on November 10 into the Big Two Company account.
?The bank statement indicated bank service charges of $25.00 for November.
?Outstanding cheques as of November 30, 2011, amount to $2,500.15.
?Deposits in transit as of November 30, 2011, amount to $1,000.
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