Ex. 206
The following adjusting entries for Pare Company were prepared after completing a bank reconciliation. For each of the following adjustments, prepare a probable explanation for the adjusting entry.
1.Supplies...............................................150
Cash.............................................150
2.Accounts Receivable—B. Lowe...............................420
Cash.............................................420
3.Cash.................................................2,200
Notes Receivable....................................2,000
Interest Revenue....................................200
4.Sales Revenue...........................................81
Cash.............................................81
5.Miscellaneous Expense....................................20
Cash.............................................20
Ex. 207
The cash balance per books for Feagen Company on September 30, 2014 is $10,740.93. The following checks and receipts were recorded for the month of October, 2014:
Checks Receipts
No. Amount No. Amount Amount Date
17$372.9622$ 578.84$843.8610/ 5
18$780.6223$1,687.50$941.5410/21
19$157.0024$ 921.30$808.5810/27
20$587.5025$ 246.03$967.0010/30
21$234.15
Ex. 207(Cont.)
In addition, the bank statement for the month of October is presented below:
Balance Deposits and Credits Checks and Debits Balance
Last StatementNo.Total AmountNo.Total AmountThis Statement
————————————————————————————————————————
$5,404.845$10,178.3610$3,632.19$11,951.01
————————————————————————————————————————
Checks and other debits DepositsDateBalance
———————————————————————
No.AmountNo.AmountNo.Amount
————————————————————————————————————————
14148.2917372.9622578.845,484.3810/ 1$9,875.31
18708.6224921.30843.8610/ 8$9,219.03
19157.0025246.03941.5410/23$9,541.58
21234.1535.00SC808.5810/29$10,101.01
230.00NSF2,100.00CM10/31$11,951.01
————————————————————————————————————————
Symbols: NSF (Not sufficient funds) SC (Service charge) CM (Credit Memo)
————————————————————————————————————————
Check No. 18 was correctly written for $708.62 for a payment on account. The NSF check was from S. Long, a customer, in settlement of an accounts receivable. An entry had not been made for the NSF check. The credit memo is for the collection of a note receivable including interest of $60 which has not been accrued. The bank service charge is $35.00.
Instructions
(a)Prepare a bank reconciliation at October 31.
(b)Prepare the adjusting journal entries required by the bank reconciliation.