7-12

Exercise 7-12

The information below relates to the Cash account in the ledger of Wasson Company.

Balance September 1—$17,150;		Cash deposited—$64,000.
Balance September 30—$17,404;		Checks written—$63,746.

The September bank statement shows a balance of $16,122 on September 30 and the following memoranda.

Credits		Debits
Collection of $1,500 note plus interest $30		$1,530		NSF check: Violet Jones		$725
Interest earned on checking account		$45		Safety deposit box rent		$65

At September 30, deposits in transit were $4,450, and outstanding checks totaled $2,383 (a) Prepare the bank reconciliation at September 30.  (Reconcile the bank balance first and then the book balance.)

Wasson Company Bank Reconciliation September 30
				$
Add:
Less:
				$
				$
Add:			$
Less:
				$

(b) Prepare the adjusting entries at September 30, assuming (1) the NSF check was from a customer on account, and (2) no interest had been accrued on the note.  (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
1.
	(To record note receivable.)
2.
	(To record interest earned.)
3.
	(To record NSF check.)
4.
	(To record safety deposit rent.)