3. A) Prepare a bank reconciliation statement for the B. Alvi Co Use the blank account form below. B) Journalize the necessary entries. - The company's September 30 Cash account balance is 9435 - A deposit of 965 was recorded in the cash receipts journal, but does not appear on the bank statement. - Attached to the bank statement is a debit memo for 85 for J. Pizl's NSF cheque, including 40 in NSF charges, all to be charged back. - Bank service charges of 40 are shown on the bank statement. - These cheques were recorded in the cash payments journal, but do not appear on the bank statement: No. 87 750 No. 91 400 - The bank statement balance is 9495

**A) Bank Reconciliation Statement for B. Alvi Co. as of September 30**<br /><br />| Bank Side | Amount | Book Side | Amount |<br />|-------------------------------------------|--------|----------------------------------------|--------|<br />| Balance per Bank Statement | $9,495 | Balance per Books | $9,435 |<br />| Add: Deposit in Transit | $965 | Add: | |<br />| | | | |<br />| Less: Outstanding Cheques | | Less: NSF Cheque - J. Pizl | $85 |<br />| No. 87 | $750 | Bank Charges on NSF Cheque | $40 |<br />| No. 91 | $400 | Bank Service Charges | $40 |<br />| | | | |<br />| Adjusted Bank Balance | $8,310 | Adjusted Book Balance | $8,310 |<br /><br /><br />**B) Journal Entries**<br /><br />1. **To record the NSF cheque and charges:**<br /><br /> * Debit Accounts Receivable - J. Pizl: $85 (This reinstates the receivable from J. Pizl since the cheque bounced.)<br /> * Debit Bank Charges Expense: $40 (This records the bank's fee for processing the NSF cheque.)<br /> * Credit Cash: $125 (This reduces the cash balance to reflect the NSF cheque and charges.)<br /><br />2. **To record the bank service charges:**<br /><br /> * Debit Bank Charges Expense: $40<br /> * Credit Cash: $40<br /><br /><br />**Explanation of Reconciliation:**<br /><br />* **Deposit in Transit:** This is a deposit made by the company but not yet processed by the bank. It increases the bank balance.<br />* **Outstanding Cheques:** These are cheques written by the company but not yet cashed by the recipients. They decrease the bank balance.<br />* **NSF Cheque:** A "non-sufficient funds" cheque means the payer (J. Pizl) didn't have enough money in their account to cover the cheque. This decreases the book balance. The associated charges also decrease the book balance.<br />* **Bank Service Charges:** These are fees charged by the bank for services. They decrease the book balance.<br /><br />The adjusted bank balance and the adjusted book balance should always match after the reconciliation. This confirms that the company's records and the bank's records are in agreement.<br />