PROBLEM 2-1 (IAA)

a. Prepare a bank reconciliation using adjusted balance method.

BOOK BALANCE 65,000 BANK BALANCE
ADD: CREDIT MEMOS 30,000 30,000 ADD: DEPOSIT IN TRANSIT
TOTAL: 95,000 TOTAL:
LESS: DEBIT MEMOS 2,000 (2,000) LESS: OUTSTANDING CHECK
ADJUSTED BOOK BALANCE: 93,000

ADJUSTED BANK BALANCE:

b. Prepare adjusting entries

1. Cash in Bank 30,000
Notes receivable 30,000

2. Bank Service Charge 2,000

Cash in Bank 2,000
 108,000
80,000 80,000
188,000
15,000
30,000
50,000 (95,000)
93,000
PROBLEM 2-3 (IAA)
a. Prepare bank reconciliation on Feb 28, showing the book balances before and after adjustment.
BOOK BALANCE 2,840,000 BANK BALANCE
ADD: CREDIT MEMOS 270,000 ADD: DEPOSIT IN TRANSIT
TOTAL: 3,110,000 TOTAL:
LESS: DEBIT MEMOS (5,000) LESS: OUTSTANDING CHECKS
ADJUSTED BOOK BALANCE: 3,105,000

ADJUSTED BANK BALANCE:

b. Prepare adjusting entries on December 31

1. Cash in Bank 270,000
Bank Service Charge 10,000
Note Receivable 250,000
Interest Income 30,000

2. Bank Service Charge 5,000

Cash in Bank 5,000
3,265,000
450,000
3,715,000
(60,000)
(180,000)
(120,000)
(250,000)
3,105,000