Preparation of bank reconciliation statement and passing journal entries.

Randy's Spa Supplies Co. received its bank statement for the month of January, and his assistant controller, Rebbie collected the information needed to complete a bank reconciliation. Here is the information needed to complete the bank reconciliation.

Bank Reconciliation. Use the following information to complete a bank reconciliation for Randy's Spa Supplies.

• The balance on the bank statement at 1/31 is $44,750.
• The book balance is $49,572 on 1/31.

1. Deposits in transit total $14,800.

2. The bank collected EFT payments from Randy's credit customers (customers paying their balances online), totaling $6,900.

3. Randy's accounting staff made a mistake when recording a deposit. The accounting records showed a deposit of $26,400. The bank statement correctly showed the deposit for $24,600. The deposit was for Cash Sales.

4. Randy's Spa Supplies has $12,100 in outstanding checks.

5. The bank paid interest on the account, totaling $138.

6. A check for $7,250 from Janet's Spa was payment for her Accounts Receivable balance. When it was deposited, the check bounced. The bank statement showed the check as NSF. The bank also charged a fee of $35 for processing the NSF check.

7. The bank statement showed the bank's monthly service charge of $75

1.      Requirement 1.

Prepare a bank reconciliation.  Use a format like the one shown on page 370, Illustration 8-12.

For the Conference, you should show the adjusted cash balance, and show how you got it.

2. Through 25. Requirement 2.

Prepare journal entries for the items that should be journalized on Randy's books. HINT: There are five journal entries.