The City of Rockport has a checking account with First Bank. The city’s cash balance on February 28, 20X1, was $30,000. The deposit balance on the bank’s books on February 28, 20X1, was also $30,000. The following transactions occurred during March.

All cash receipts are deposited via a night depository system after the close of the municipal business day. Therefore, the receipts are not recorded by the bank until the succeeding day.
On March 31, the bank charged the City of Rockport $100 for miscellaneous bank services.
1. Prepare the journal entries on the bank’s books for check 262 and the deposit of March 10.
2. Prepare the journal entries for all March transactions on the books of the City of Rockport.
3. Post all transactions for March to T-accounts for the City’s Cash in Bank account and the bank’s Deposit account. Assume only checks 261 to 263 have been presented to the bank in March, each taking 4 days to clear the bank’s records.
4. Prepare a bank reconciliation for the City of Rockport, March 31, 20X1. The final three City of Rockport transactions of March had not affected the bank’s records as of March 31. What adjusting entry in the books of the City of Rockport is required on March 31?
5. What would be the cash balance shown on the balance sheet of the City of Rockport on March 31,20X1?

  • CreatedFebruary 20, 2015
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