PART II — Bank Reconciliation and Related Entries

Instructions:

Your client requested that you assist them in preparing their October bank reconciliation as they are uncomfortable based on the feedback you have provided on their cash controls - please prepare the bank reconciliation and correlated journal entries based on the following information:

Bank Balance, October 31, 2021:  $15,368.50

Book Balance, October 31, 2021: $15,548.00

Notes: 

1) The bank statement included an NSF charge of $105.00 for a cheque received from a customer. 

2) The bank statement included an incorrect charge of $15.00 to the companies account for preparing their bank reconciliation, a service which was not provided by the bank. 

3) Outstanding cheques as of October 31, 2021, were $118.00.

4) $3,250 was received into the company’s bank account on October 31, 2021 for a line of credit extended by the bank.

5) Cash sales of $12.50 were incorrectly recorded as $1,250 by the company’s bookkeeper. 

6) The bank statement included a charge (debit memo) of $205.00 for the monthly bank services.

7) Deposits in transit as of October 31, 2021, were $1,985.00.

Bank Reconciliation Template:

Journal Entry Template:  note – please ignore account numbers as none have been provided.