The Tarragon Trading Company's bank statement for the month of November showed a balance per bank of $7,000. The company's Cash account in the general ledger had a balance of $5,659 at 30 November. Other information is as follows:
(1) Cash receipts for 30 November recorded on the company's books were $5,200 but this amount does not appear on the bank statement.
(2) The bank statement shows a debit memorandum for $40 for cheque printing charges.
(3) Cheque No. 119 payable to Burns Company was recorded in the cash payments journal and cleared the bank for $248. A review of the accounts payable subsidiary ledger shows a $36 credit balance in the account of Burns Company and that the payment to them should have been for $284.
(4) The total amount of cheques still outstanding at 30 November amounted to $5,800.
(5) Cheque No. 138 was correctly written and paid by the bank for $409. The cash payment journal reflects an entry for Cheque No. 138 as a debit to Accounts Payable and a credit to Cash in Bank for $490.
(6) The bank returned a dishonoured cheque from a customer for $560.
(7) The bank included a credit memorandum for $1,260, which represents collection of a customer's note by the bank for the company; principal amount of the note was $1,200 and interest was $60. Interest has not been accrued.
Required:
(a) Prepare a bank reconciliation for the Tarragon Trading Company at 30 November.
(b) Prepare any adjusting entries necessary as a result of the bank reconciliation.

Question

Quizplus · Accepted Answer

The Answer of The Tarragon Trading Company's bank statement for the month of November showed a balance per bank of $7,000. The company's Cash account in the general ledger had a balance of $5,659 at 30 November. Other information is as follows:
(1) Cash receipts for 30 November recorded on the company's books were $5,200 but this amount does not appear on the bank statement.
(2) The bank statement shows a debit memorandum for $40 for cheque printing charges.
(3) Cheque No. 119 payable to Burns Company was recorded in the cash payments journal and cleared the bank for $248. A review of the accounts payable subsidiary ledger shows a $36 credit balance in the account of Burns Company and that the payment to them should have been for $284.
(4) The total amount of cheques still outstanding at 30 November amounted to $5,800.
(5) Cheque No. 138 was correctly written and paid by the bank for $409. The cash payment journal reflects an entry for Cheque No. 138 as a debit to Accounts Payable and a credit to Cash in Bank for $490.
(6) The bank returned a dishonoured cheque from a customer for $560.
(7) The bank included a credit memorandum for $1,260, which represents collection of a customer's note by the bank for the company; principal amount of the note was $1,200 and interest was $60. Interest has not been accrued.
Required:
(a) Prepare a bank reconciliation for the Tarragon Trading Company at 30 November.
(b) Prepare any adjusting entries necessary as a result of the bank reconciliation.

The Tarragon Trading Company's Bank Statement for the Month of November