PR 8-3A
The cash account for Interactive Systems at February 28, 2010, indicated a balance of $7,635. The bank
statement indicated a balance of $13,333 on February 28, 2010. Comparing the bank statement and the
accompanying canceled checks and memos with the records reveals the following reconciling items:
a. Checks outstanding totaled $4,118.
b. A deposit of $4,500, representing receipts of February 28, had been made too late to appear on
the bank statement.
c. The bank had collected $5,200 on a note left for collection. The face of the note was $5,000.
d. A check for $290 returned with the statement had been incorrectly recorded by Interactive
Systems as $920. The check was for the payment of an obligation to Busser Co. for the purchase
of office supplies on account.
e. A check drawn for $415 had been incorrectly charged by the bank as $145.
f. Bank service charges for February amounted to $20.
Instructions
1) Prepare the bank reconciliation.
INTERACTIVE SYSTEMS
Bank Reconciliation
February 28, 2010
Cash balance according to bank statement .......................................
Add deposit of February 28, not recorded by bank...........................
Deduct: Outstanding checks ..............................................................
Bank error in charging check as $145 instead of $415 ......................
Adjusted balance................................................................................
Cash balance according to company’s records ..................................
Add: Proceeds of note collected by bank, including $200 interest ...
Error in recording check .....................................................................
$ 13,333
4,500
$ 17,833
$
4,388
$ 13,445
$7,635
$
Deduct bank service charges .............................................................
Adjusted balance................................................................................
2) Journalize the necessary entries. The accounts have not been closed.
Cash ................................................................
$5,830
Notes Receivable ......................................
$ 5,000
Interest Revenue ......................................
200
Accounts Payable—Busser Co. .................
630
Miscellaneous Administrative Expense .........
Cash ..........................................................
4,118
270
$ 20
$ 20
5,200
630
5,830
$ 13,465
20
$ 13,445
PR 8-5A