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Q3.
Brown company’s bank statement for September 30 showed a cash balance of
$1350. The company cash account in tis general ledger showed a $995 debit
balance. The following information was also available as of September 30.
a. A$125 debit memorandum is included with the bank statement and debit
with a customer check for $100 marked NSF and returned to brown
company by the bank. In addition, the bank charged the company’s a $125
processing fee.
b. The September 30 cash receipts,$1250, were placed in the bank’s night
depository after banking hours on that date and this amount did not appear
on the September 30 bank statement.
c. A$15 debit memorandum for check printed by the September 30 bank was
included with the canceled checks.
d. Outstanding checks amount to $1145
e. A customer’s note for $900 was collected by the bank. A collection fee of
$25 was deducted by the bank and the difference was deposited in the
account
f. Included with the canceled checks was a check for $275, drawn on another
company, Browne Inc.
1. Prepare a bank reconciliation as of September 30.
2. Prepare any necessary adjusting journal entries necessary as a result of the
bank reconciliation.

Cash in bank
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Un adjbal. 995 100 Nsf check

Note-Receivable 900 Bsc for the month 25
Charge for check print 15
Bsc for note receivable 25

Total Dr.bal.1895 Total Cr bal.165

Adj bal. 1730

Bank statement

Osc 1145 unadj.bal. 1350

Dit 1250
Error 275

Total Dr bal. 1145 Total Cr bal.2875

Adj bal. 1730

Brown Company
Bank Reconciliation
September 30
Unadjusted Balance per bank statement, september30………………….Br. 1,350
Add: Debit in transit………………………………………………………Br. 1250
Error ………………………………………………………………..Br.275
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Sub -total ……………………………………………………………Br. 2875

Deduct: outstanding checks……………………………………………….Br.
(1145)
Adjusted bank balance september30...........................................................Br. 1730

Unadjusted balance per depositor’s record, septmber30……………….....Br. 995

Add: Note Receivable collected by bank………………………………….Br.900
Subtotal………………………………………………………….Br. 1895
Deduct: NSF check ………………………………………………………Br. 100
Bank Service charge……………………………………………….Br.50
Charge for check printing…………………………………..Br.15...... (165)
Adjusted balance of depositor’s ……………………………………… ….Br. 1730

The following are journal entries related to the bank reconciliation

September30 cash in bank ………………..900
Notes Receivable…………………………. 900
(To record collection of Note Receivable collected by bank)

September30 Accounts Receivable………………….100

Miscellaneous Expense…………………65
Cash in bank…………………………….165

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