Answer:
Required 1 : Bank reconciliation
<u>Bank Reconciliation Statement</u>
Balance as per Bank Statement $5,170
Adjusted for error
Multi-State Freight Company $700
Balance as per adjusted Bank Statement $5,870
Add Lodgements not yet credited :
White treasurer`s deposit $290
Less Unpresented Cheques :
237 $90
288 $150
291 $580
294 $590
295 $10
296 $150 ($1,570)
Balance as per Cash Book $4,590
Required 2 : Journal entries
<u>Journal 1.</u>
Bank Service Charge $70 (debit)
Trade Receivables $540 (debit)
Bank $610 (credit)
<u>Journal 2.</u>
Bank $2,500 (debit)
Credit Transfer $ l,400 (credit)
Dividend Revenue $l,050 (credit)
Interest Revenue $50 (credit)
Explanation:
The first step to prepare a bank reconciliation is to update the cash book.
Cash Book (Bank Balances)
<u>Debit :</u>
Balance as per Cash Book $2,700
Credit Transfer $ l,400
Dividend Revenue $l,050
Interest Revenue $50
Totals $5,200
<u>Credit :</u>
Dishonored Cheques ($420 + $120) $540
Bank Service Charge $70
Adjusted Cash Book Balance $4,590
Totals $5,200
The Next step is to prepare a Bank Reconciliation Statement
<u>Bank Reconciliation Statement</u>
Balance as per Bank Statement $5,170
Adjusted for error
Multi-State Freight Company $700
Balance as per adjusted Bank Statement $5,870
Add Lodgements not yet credited :
White treasurer`s deposit $290
Less Unpresented Cheques :
237 $90
288 $150
291 $580
294 $590
295 $10
296 $150 ($1,570)
Balance as per Cash Book $4,590
Journal Entries to Correct the Cash Book :
<u>Journal 1.</u>
Bank Service Charge $70 (debit)
Trade Receivables $540 (debit)
Bank $610 (credit)
<u>Journal 2.</u>
Bank $2,500 (debit)
Credit Transfer $ l,400 (credit)
Dividend Revenue $l,050 (credit)
Interest Revenue $50 (credit)