Posted: November 28th, 2015

Bank reconciliation and the adjusting entries

Financial Accounting – Project II.

The bank portion of the bank reconciliation for the Louda Company at October 31, 2007 as as follows:
LOUDA COMPANY
Bank Reconciliation
October 31, 2007
Cash balance per bank	$12,367.90
Add: Deposits in transit	1,530.20
13,898.10

Less:	Outstanding checks
Check Number	Check Amount
2451	$1,260.40
2470	720.10
2471	844.50
2472	426.80
2474	1,050.00	4,301.80

Adjusted cash balance per bank	9,596.30

The adjusted cash balance per bank agreed with the cash balance per books at October 31st.

The November bank statement showed the following checks and deposits.

Bank Statement

Checks	Deposit
Date	Number	Amount	Date	Amount
11-1	2470	$ 720.10	11-1	$1,530.20
11-2	2471	844.50	11-4	1,211.60
11-5	2474	1,050.00	11-8	990.10
11-4	2475	1,640.70	11-13 2,575.00
11-8	2476	2,830.00	11-18	1,472.70
11-10	2477	600.00	11-21	2,945.00
11-15	2479	1,750.00	11-25	2,567.30
11-18	2480	1,330.00	11	-28	1,650.00
. 11-27	2481	695.40	11-30	1,186.00
11-29	2483	575.50	Total	$16,127.90
11-30	2486	900.00
Total	$12,936.20

The cash records per books for November show the following information:

Cash Payments Journal Cash Receipts Journal

Date	Number	Amount	Date	Number	Amount	Date Amount
11-1	2475	$1,640.70	11-20	2483	575.50	11-3 $1,211.60
11-2	2476	2,830.00	11-22	2484	829.50	11-7	990.10
11-2	2477-	600.00	11-23	2485	974.80	11-12 2,575.00
11-4	2478	538-20	11-24	2486	900.00	11-17 1,472.70
11-8	2479	1,570.00	11-29	2487	398.00	11-20 2,954.00
11-10	2480	1,330.00	11-30	2488	800.00	11-24 2,567.30
11-15	2481	695.40	Total	$14,294.10	11-27	1,650.00
11-18	2482	612.00	11-29	1,186.00
11-30	1,225.00
Total $15,831.70

The bank statement contained two bank memoranda:
1. A credit of $2,105.00 for the collection of a $2,000 note for Louda Company plus interest of $120 and less a collection fee of $15.
Louda Company accrued interest to the maturity of the note.

2. A debit for the printing of additional company checks, $50.00.

At November 30 the cash balance per books was $11,133.90 and the cash balance per the bank statement was $17,614.60.
The bank did not make any errors but two errors were made by Louda Company.

Instructions:

(a) Prepare the bank reconciliation at November 30, 2007

(b) Prepare the adjusting entries based on the reconciliation. (Note. The correction of any errors pertaining to recording checks should be made to Accounts Payable. The correction of any errors relating to recording cash receipts should be made to Accounts Receivable.)

				Financial Accounting – Project II.


The bank portion of the bank reconciliation for the Louda Company at October 31, 2007 as as follows:

		LOUDA COMPANY
		Bank Reconciliation
		 October 31, 2007

	Cash balance per bank		      $12,367.90
	Add: Deposits in transit		 1,530.20
			13,898.10

Less:	Outstanding checks
	Check Number	Check Amount
	2451	 $1,260.40
	2470	720.10
	2471	844.50
	2472	426.80
	2474	1,050.00	4,301.80

	Adjusted cash balance per bank		9,596.30

The adjusted cash balance per bank agreed with the cash balance per books at October 31st.

The November bank statement showed the following checks and deposits.

			Bank Statement


		Checks					Deposit
	Date	Number	Amount		Date		Amount
	11-1	2470	$ 720.10	  	11-1	              $1,530.20
	11-2	2471	844.50		11-4		1,211.60
	11-5	2474	1,050.00		11-8		   990.10
	11-4	2475	1,640.70	                             11-13       	2,575.00
	11-8	2476	2,830.00		                     11-18		1,472.70
	11-10	2477	600.00		      11-21		2,945.00
	11-15	2479	1,750.00		 11-25		2,567.30
	11-18	2480	1,330.00	                           11	-28		1,650.00
	.  11-27	2481	695.40		          11-30		1,186.00
	11-29	2483	575.50		Total	            $16,127.90
	11-30	2486	900.00
		Total	$12,936.20


The cash records per books for November show the following information:


Cash Payments Journal                                                        		         Cash Receipts  Journal

	Date	Number	Amount	Date	Number	Amount		Date	Amount
	11-1	2475	$1,640.70	11-20	2483	575.50	                          11-3                $1,211.60
	11-2	2476	2,830.00	11-22	2484	829.50	                          11-7	      990.10
	11-2	     2477-	600.00	11-23	2485	974.80	  	11-12	   2,575.00
	11-4	2478	538-20	11-24	2486	900.00		11-17	   1,472.70
	11-8	2479	1,570.00	11-29	2487	398.00		11-20	   2,954.00
	11-10	2480	        1,330.00	11-30	2488	800.00		11-24	   2,567.30
	11-15	2481	695.40	Total		$14,294.10		11-27	   1,650.00
	11-18	2482	612.00					11-29	   1,186.00
								11-30	   1,225.00
								                          Total              $15,831.70

The bank statement contained two bank memoranda:
1. A credit of $2,105.00 for the collection of a $2,000 note for Louda Company plus interest of $120 and less a collection fee of $15.
 Louda Company accrued interest to the maturity of the note.

2.  A debit for the printing of additional company checks, $50.00.

At November 30 the cash balance per books was $11,133.90 and the cash balance per the bank statement was $17,614.60.
The bank did not make any errors but two errors were made by Louda Company.

Instructions:

 (a)  Prepare the bank reconciliation at November 30, 2007

 (b) Prepare the adjusting entries based on the reconciliation. (Note. The correction of any errors pertaining to recording checks should be made to Accounts Payable.  The correction of any errors relating to recording cash receipts should be made to Accounts Receivable.)