Reference no: EM132740313

Bank Reconciliation and Journal Entries

The following information is available for the Mary's Quilting Company for the month of October.

a. On October 31, after all transactions have been recorded, the balance in the company's Cash account has a balance of $24,575.

b. The company's bank statement shows a balance on October 31 of $21,050.

c. Outstanding checks at October 31 total $1,500.

d. A credit memo included with the bank statement indicates that we earned $13 in interest for the month of October.

e. A debit memo included with the bank statement shows a $150 NSF check from a customer, S. Smith.

f. A deposit placed in the bank's night depository on October 31 totaling $4,783 did not appear on the bank statement.

g. Comparing the checks on the bank statement with the entries in the accounting records reveals that check #1225 for the payment of a Utilities Expense was correctly written for $1,540, but was recorded in the accounting records as $1,450 in error.

h. Included with the bank statement was a debit memorandum in the amount of $15 for bank service charges. It has not been recorded on the company's books.

Problem 1. Prepare the October bank reconciliation for the Mary's Quilting Company.

Problem 2. Prepare the general journal entries to bring the company's book balance of cash into conformity with the reconciled balance as of October 31st.