Stewart Recording Studio, owned by Ron Stewart, showed the following bank reconciliation at March 31:

Stewart Recording Studio
Bank Reconciliation
March 31, 2020
Bank statement balance				$	21,100	Book balance	$	29,545
Add:
Deposit of March 31 in transit					9,547
				$	30,647
Deduct:
Outstanding cheques:
#14	$	801
#22		301			1,102
Adjusted bank balance				$	29,545	Adjusted book balance	$	29,545

Cash								Acct. No. 101
Date			Explanation	PR	Debit		Credit	Balance
2020
March	31		Balance					29,545
April	30			CR17	70,384			99,929
	30			CD13			88,394	11,535

A list of deposits made and cheques written during April, taken from the Cash Receipts Journal and Cash Disbursements Journal, is shown below:

Deposits Made
April	7		$	680
	13			4,530
	18			5,813
	23			13,694
	27			1,724
	30			43,943
Total April Cash Receipts			$	70,384

Cheques Written
No.	23		$	5,115
	24			3,103
	25			929
	26			300
	27			4,091
	28			4,900
	29			18,971
	30			39,460
	31			402
	32			11,123
Total April Cash Disbursements			$	88,394

The following bank statement is available for April:

Bank Statement
To: Stewart Recording Studio						April 30, 2020 Bank of Canada
Cheques/Charges						Deposits/Credits			Balance
									21,100
#31	04/03		402			04/03	9,547		30,245
#28	04/07		9,400			04/07	680		21,525
#26	04/13		300			04/13	4,530		25,755
NSF	04/18		13,736			04/18	5,813		17,832
#24	04/23		3,103			04/23	13,694		28,423
#23	04/27		5,115			04/27	1,724		25,032
#29	04/30		18,971			04/30	110,000		116,061
PMT	04/30		15,362						100,699
INT	04/30		368						100,331
SC	04/30		177						100,154
NSF = Not Sufficient Funds		SC = Service Charge				PMT = Payment of Principal on the loan			INT = Interest on Bank Loan

• In reviewing cheques returned by the bank, the bookkeeper discovered that cheque #28, for delivery expense, was recorded in the Cash Disbursements Journal correctly as $4,900.
• The NSF cheque for $13,736 was that of customer Oprah Winney, deposited in March.
• On the bank statement, the payment for $15,362 is regarding a note payable.
• There is also a deposit of $110,000 dated April 30. It is an investment made by the owner into the business (the bank transferred the funds electronically from the owner’s personal account to his business account, which is why it was not recorded in the Cash Receipts Journal).

Required:
a. Prepare a bank reconciliation for Stewart Recording Studio at April 30.

STEWART RECORDING STUDIO

Bank Reconciliation

April 30, 2020

Bank Statement Company's Books

Bank statement balance     Book balance

Add: Add:

Deduct: Deduct:

Outstanding cheques:

Adjusted bank balance Adjusted book balance

b. Prepare the necessary journal entries to bring the General Ledger Cash account into agreement with the adjusted balance on the bank reconciliation.

- Record to reinstate customer account.

- Record the April bank service charges.

- Record the April interest expense.

- Record the April payment on note.

- Record the investment by owner.

If you could answer these but also explain why you did each answer and your though process and how you broke down the question im trying to learn how to do it myself as well. thankyou so much <3

Answer rating: 100% (QA)

Solution Bank reconciliation statement is a statement which is prepared to find the reasons behind the differences between bank statement and Cash boo... View the full answer