Red Lake Brewing Company (RLB) has a bank account with Manitoba Bank. RLB receives their bank statement at the end of each month along with the cancelled cheques. The January 2020 bank statement included the following information:

Balance, January 1, 2020                      32,690

Deposits                                                 86,000

Cheques processed                            (75,200)

Bank service charges                               (350)

NSF cheques                                         (1,600)

Monthly loan payment                         (3,400)

Balance January 31, 2020                    38,140

The company’s general ledger cash (chequing) account had a balance of $42,544 at the end of January. Deposits outstanding totaled $4,224 and all cheques written by the company were processed by the bank except for those totaling $5,620. In addition, a cheque for $500 for the purchase of office furniture was incorrectly recorded by the company as a $50 disbursement. The bank correctly processed the cheque during January.

Required:

• Prepare a bank reconciliation for the month of January

• Prepare the necessary journal entries at the end of January to adjust the general ledger cash account.

Answer rating: 100% (QA)

Requi... View the full answer