Question

The Hartman Boat Company's bank statement for the month of November showed a balance per

bank of $7,000.

The company's Cash account in the general ledger had a balance of $5,659 at
November 30.

Other information is as follows:
(1) Cash receipts for November 30 recorded on the company's books were $6,000 but this
amount does not appear on the bank statement.
(2) The bank statement shows a debit memorandum for $40 for check printing charges.
(3) Check No. 119 payable to Maris Company was recorded in the cash payments journal and
cleared the bank for $248. A review of the accounts payable subsidiary ledger shows a
$36 credit balance in the account of Maris Company, and that the payment to them should
have been for $284.
(4) The total amount of checks still outstanding on November 30 amounted to $5,800.
(5) Check No. 138 was correctly written and paid by the bank for $409. The cash payment
journal reflects an entry for Check No. 138 as a debit to Accounts Payable and a credit to
Cash in Bank for $490.
(6) The bank returned an NSF check from a customer for $560.
(7) The bank included a credit memorandum for $2,060, which represents the collection of a
customer's note by the bank for the company; the principal amount of the note was $2,000
and interest was $60. Interest has not been accrued.
Prepare a bank reconciliation for the Hartman Boat Company on November 30.

Answer 1

To prepare a bank reconciliation for the Hartman Boat Company as of November 30, we need to reconcile the balance in the company's Cash account in the general ledger with the balance on the bank statement. We will consider the items listed and make the necessary adjustments:

Bank Statement Balance (per bank): $7,000

Cash Account (per general ledger): $5,659

Let's go through the adjustments:

1. Cash receipts for November 30 recorded on the company's books were $6,000 but not on the bank statement. This means that there is an outstanding deposit of $6,000.

2. The bank statement shows a debit memorandum for $40 for check printing charges. We need to subtract this bank fee from the Cash Account.

3. Check No. 119 payable to Maris Company was recorded in the cash payments journal and cleared the bank for $248. There is a discrepancy of $284 - $248 = $36. This is an error in the company's records. We should add $36 to the Cash Account.

4. The total amount of checks still outstanding on November 30 amounted to $5,800. We should subtract this amount from the bank balance because these checks have not cleared yet.

5. Check No. 138 was correctly written and paid by the bank for $409. The company mistakenly recorded it as $490. We need to subtract the excess amount of $490 - $409 = $81 from the Cash Account.

6. The bank returned an NSF check from a customer for $560. This check was previously recorded on the company's books but should be subtracted from the Cash Account.

7. The bank included a credit memorandum for $2,060, which represents the collection of a customer's note. This needs to be added to the Cash Account.

Now, let's calculate the adjusted balances:

Cash Receipts (Outstanding Deposit): +$6,000

Check Printing Charges: -$40

Adjustment for Check No. 119: +$36

Outstanding Checks: -$5,800

Adjustment for Check No. 138: -$81

NSF Check: -$560

Credit Memorandum for Note Collection: +$2,060

Now, calculate the adjusted Cash Account balance:

Adjusted Cash Account balance = $5,659 + $6,000 - $40 + $36 - $5,800 - $81 - $560 + $2,060

Calculate the adjusted Cash Account balance:

Adjusted Cash Account balance = $1,254

Now that the Cash Account balance has been adjusted, we have:

Bank Statement Balance (per bank): $7,000

Adjusted Cash Account (per general ledger): $1,254

The adjusted Cash Account balance should now match the Bank Statement balance.

Step-by-step explanation:

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