Question

The following information is available for Pyle Garage for March 2018
BANK STATEMENT
HAZARD STATE BANK 215 MAIN STREET HAZARD, GA 30321 - Account number 62-00062 - March 31, 2018
Beginning balance 3/1/2018 $9,083
Total deposits and other credits 30,155
Total checks and other debits 25,110
Ending balance 3/31/2018 14,125
Checks and Debits
Check No. Amount
1462 $3,805
1463 1,693
1464 8,050
1465 2,951
1466 1,455
1467 6,230
DM 69
1468 860
Deposits and Credits
Date Amount
March 1 $1,150
March 2 6,554
March 6 4,987
March 12 6,219
March 17 6,013
March 22 2,134
CM 3,098
The following is a list of checks and deposits recorded on the books of Pyle Garage for March 2018:
Date Check No. Amount of Check Date Amount of Deposit
March 1 1463 $1,693 March 1 $6,554
March 5 1464 8,050 March 5 4,987
March 6 1465 2,951
March 9 1466 1,455 March 10 6,219
March 10 1467 6,230
March 14 1468 150 March 16 6,013
March 19 1469 1,546 March 19 2,134
March 28 1470 793 March 29 3,593
Other information:
1. Check no. 1462 was outstanding from February
2. A credit memo for collection of accounts receivable was included in the bank statement.
3. All checks were paid at the correct amount.
4. The bank statement included a debit memo for service charges.
5. The February 29 bank reconciliation showed a deposit in transit of $1,150
6. Check no. 1468 was for the purchase of equipment.
7. The unadjusted Cash account balance at March 31, was $13,060.
Required
a. Prepare the bank reconciliation for Pyle Garage at the end of March.
b. How the adjustments described above affect the cash account.

Answer 1

Answer:

                                      Pyle Garage

                                 Bank Reconciliation

                                   March 31, 2018

Unadjusted Bank Balance,                                  $14,125

March 31, 2018

Add: Deposit in Transit                                          $3,593

Less: Outstanding Checks #1469        $1,546

Outstanding Checks 1470                     $793          ($2,339)

True Cash Balance, March 31, 2018                     $15,379

 

Unadjusted Book Balance, March 31, 2018              $13,060

Add: Credit Memo for Collection of                        $3,098

Accounts Receivable  

Less: Error in Recording Check #1468          $710

         Debit Memo for Service Charges         $69    ($779.00)

True Cash Balance, March 31, 2018                        $15,379

b.  Account Titles                            Debit        Credit

   Cash                                           $3,098

         Accounts Receivable                            $3,098

   Equipment                                   $710

          Cash                                                        $710

   Bank Service Charge Expense   $69

           Cash                                                        $69