Reference no: EM132525795
Question - The following information is available to reconcile Cloy Company's book balance of cash with its bank statement cash balance as of March 31, 2019. The March 31, 2019 cash balance according to the accounting records is $58,542, and the bank statement cash balance for that date is $68,047.
a. The bank erroneously cleared a $395 check against the account in March that was not issued by Cloy. The check documentation included with the bank statement indicates the check was actually issued by Clare Co.
b. On March 31, the bank issued a credit memorandum for $35 interest earned on Cloy's account.
c. When the March checks are compared with entries in the accounting records, it is found that Check No. 1727 had been correctly drawn for $1,450 to pay for advertising but was erroneously entered in the accounting records as $1,540.
d. A credit memorandum indicates that the bank collected $9,000 cash on a note receivable for Cloy, deducted a $30 collection fee, and credited the balance to the company's Cash account. Cloy did not record this transaction before receiving the statement.
e. A debit memorandum of $895 is enclosed with the bank statement for an NSF check for $870 received from a customer. The bank assessed a $25 fee for processing it.
f. Cloy's March31, daily cash receipts of $6,325 were placed in the bank's night depository on that date, but do not appear on the March 31 bank statement.
g. Cloy's March 31 cash disbursements journal indicates that Check No. 1737 for $4,830 and Check No. 1740 for $3,280 were both written and entered in the accounting records, but are not among the canceled checks.
h. A debit memorandum for $85.00 indicates the bank deducted the annual lock box fee for the company.
Required -
1. Prepare the bank reconciliation for this company as of March 31, 2019.
2. Prepare the journal entries necessary to bring the company's book balance of cash into conformity with the reconciled cash balance as of March 31, 2019.
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