On August 31, Kravsnik Company receives its bank statement. The company deposits its receipts in the bank and makes all payments by check. The debit memo for $149 is for an NSF check written by N. Carlton. Check no. 1924 for $336, payable to Garner Company (a creditor), was incorrectly recorded in the checkbook and journal as $200.
The balance of the Cash account as of August 31 is $1,509. Outstanding checks as of August 31 are: no. 1928, $119; no. 1929, $243. The accountant notes that the deposit of August 31 for $261 did not appear on the bank statement.
Instructions:
(a) Prepare a bank reconciliation as of August 31, assuming that the debit memos have not been recorded.
(b) Record the necessary journal entries.
Peabody National Bank
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Kravsnik Company
416 Seneca Avenue
Kansas City, Missouri 64102
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Account No.
152-6 55-217
Statement Date:
August 1-31
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Summary: Balance Last Statement $1,360.00
Amount of Checks and Debits $2,698.00
Number of Checks 11
Amount of Deposits and Credits $2,651.00
Number of Deposits 7
Balance this Statement $1,313.00
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Checks/Other Debits
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Checks
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Check Number
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Date Posted
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Amount
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Check Number
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Date Posted
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Amount
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1917
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8-04
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172.00
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1923
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8-09
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621.00
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1918
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8-04
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76.00
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1924
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8-17
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336.00
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1919
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8-05
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146.00
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1925
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8-17
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14.00
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1920
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8-07
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206.00
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1926
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8-23
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533.00
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1921
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8-07
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139.00
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1927
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8-28
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94.00
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1922
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8-08
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200.00
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Other Debits
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Description
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Date Posted
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Amount
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DM NSF check
DM Service charge
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8-31
8-31
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149.00
12.00
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Deposits/Other Credits
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Deposits
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Date Posted
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Amount
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Date posted
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Amount
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8-02
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326.00
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8-18
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419.00
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8-05
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412.00
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8-24
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398.00
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8-09
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437.00
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8-28
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291.00
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Please examine this statement carefully. Report any possible errors in 10 days.
Code Symbols
CM Credit Memo DM Debit Memo OD Overdraft EC Error Correction
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