Answer
Reddan Company
Balance as per Cash Book = $12,045
Add note collected by bank = $4,000
Add outstanding interest on note= $160.
Add outstanding checks = $5,575
Deduct bank charges = $30
Deduct deposit in transit = $3,500
Adjusted cash balance = $18,250
Step 2/compare adjusted cash balance to bank balance
Adjusted cash balance = $18,250
Bank balance = $18,250
Difference = Nil.
B.
Journal entries
Dr. 110 Cash with $4,000
Cr. 131 Note receivable with $4,000
(note collected by bank)
Dr. 110 Cash with $160
Cr. 610 interest revenue with $160
(Interest on note collected by bank)
Dr. 110 Cash with $5,575
Cr. 210 Account payable with $5,575
(Outstanding checks unpresented)
Dr. 590/miscellenous expese with $30.
Cr. 110 Cash with $30
(Bank charges expenses)
Dr. 120 Account receivable with $3,500
Cr. 110 Cash with $3,500
( deposit in transit )
Answer:
A) The adjusted Balances in the Company Records $16,175. (See Attachment for calculation)
B) Journals
1) Dr Bank Charge Expense Cr Bank Account $30 (Bank Service Charge)
2) Dr Bank Account Cr Notes Receivable $4,160
3) Dr Interest on Notes Expense Cr Notes Receivable $160 (Interest on Note Receivable)
Explanation:
Se attachment
