Question

Johnson Corporation's bank statement for October reports an ending balance of $22,381, whereas Johnson's cash account shows a balance of $22,025 on October 31. The following additional information is available: A $855 deposit made on October 31 was not recorded by the bank until November. At the end of October, outstanding checks total $1,222. The bank statement shows bank service charges of $125 not yet recorded by the company. The company erroneously recorded as $973 a check that it had actually written for $379. It was correctly processed by the bank. A $480 check from a customer, deposited by the company on October 29, was returned with the bank statement for lack of funds.

Required:
Prepare the October bank reconciliation for Johnson Corporation.

Answer 1

The October bank reconciliation for Johnson Corporation is prepared below

Step-by-step explanation:

Johnson Corporation Bank Reconciliation Schedule Oct-31

Cash Balance from Bank Statement $22,381

Add: Deposit in Transit $855

Less: Outstanding Checks $1,222

Adjusted Cash Balance $22,014

Cash Balance from Company records $22,025

Add: Error in recording check ($973- $379) $594

Less: Service Charge & NSF Check ($125 + $480) $605

Adjusted Cash Balance $22,014

Answer 2

See explanation section

Step-by-step explanation:

Johnson Corporation

Bank Reconciliation Statement

Cash balance from bank statement $22,381

Add: Deposit-in-transit $855

Less: Outstanding check (1,222)

Adjusted cash in bank statement = $22,014

Cash balance from cash book $22,025

Add: Error in recording $594

Adjustment before charge = $22,619

Less: NSF cheque (480)

Bank service charge (125)

Adjusted cash balance as per cash book = $22,014