Question

This information relates to the Cash account in the ledger of Cullumber Company, Balance September 1−$17,000; Cash deposited −$64,000 Balance September 30−$17,604; Checks written- $63,396. The September bank statement shows a balance of $16,622 at September 30 and the following memoranda. At September 30 , deposits in transit were $4,550, and outstanding checks totaled $2,483. (a) Your answer has been saved. See score details after the due date. Prepare the bank reconciliation at September 30, 2022. (List items that increase cash balance first. Reconcile cash balance per bank first.) Prepare the adjusting entries at September 30 , assuming the NSF check was from a customer on account. (Credit account titles are nuthmatirallu indented when amount is entered. Do not indent manually.)

Answer 1

To prepare the bank reconciliation at September 30, 2022, compare the cash balance per the company's records and bank statement. Consider deposits in transit and outstanding checks. Make adjusting entries for an NSF check.

Step-by-step explanation:

To prepare the bank reconciliation at September 30, 2022, we need to compare the cash balance per the company's records (ledger) with the cash balance per the bank statement.

The cash balance per the company's records is calculated by taking the balance at the beginning of the month, adding the cash deposited during the month, and subtracting the checks written during the month. In this case, the cash balance per the company's records is $17,000 (beginning balance) + $64,000 (cash deposited) - $63,396 (checks written), which equals $17,604.

The cash balance per the bank statement is given as $16,622. To reconcile the two balances, we need to consider the deposits in transit and the outstanding checks. Deposits in transit are deposits that have been made by the company but haven't yet been recorded by the bank. Outstanding checks are checks that have been written by the company but haven't yet been cleared by the bank. In this case, deposits in transit are $4,550 and outstanding checks are $2,483.

To reconcile the cash balance per the bank, we can add the deposits in transit ($4,550) to the cash balance per the bank statement and then subtract the outstanding checks ($2,483). This gives us $16,622 + $4,550 - $2,483, which equals $18,689.

Bank Reconciliation at September 30, 2022:

Cash balance per company's records: $17,604

Cash balance per bank statement: $18,689

Adjusting entries:

• NSF (non-sufficient funds) check from a customer on account: Debit Accounts Receivable (or the customer's account receivable) and Credit Cash, and the amount of the NSF check.