Question

Problem 8-05A a-b (Part Level Submission) (Video)

The bank portion of the bank reconciliation for Vaughn Company at November 30, 2020, was as follows.

Vaughn COMPANY Bank Reconciliation November 30, 2020
Cash balance per bank				$14,767.90
Add: Deposits in transit				2,530.20
				17,298.10
Less: Outstanding checks
Check Number		Check Amount
3451		$ 2,260.40
3470		720.10
3471		844.50
3472		1,426.80
3474		1,054.50		6,306.30
Adjusted cash balance per bank				$10,991.80

The adjusted cash balance per bank agreed with the cash balance per books at November 30.

The December bank statement showed the following checks and deposits.

Bank Statement
Checks						Deposits
Date		Number		Amount		Date		Amount
12-1		3451		$2,260.40		12-1		$ 2,530.20
12-2		3471		844.50		12-4		1,211.60
12-7		3472		1,426.80		12-8		2,365.10
12-4		3475		1,640.70		12-16		2,672.70
12-8		3476		1,300		12-21		2,945
12-10		3477		2,130		12-26		2,567.30
12-15		3479		3,080		12-29		2,836
12-27		3480		600		12-30		1,025
12-30		3482		475.50		Total		$18,152.90
12-29		3483		1,140
12-31		3485		520.80
		Total		$15,418.70

The cash records per books for December showed the following.

Cash Payments Journal												Cash Receipts Journal
Date		Number		Amount		Date		Number		Amount		Date		Amount
12-1		3475		$1,640.70		12-20		3482		$475.50		12-3		$ 1,211.60
12-2		3476		1,300		12-22		3483		1,140		12-7		2,365.10
12-2		3477		2,130		12-23		3484		793.50		12-15		2,672.70
12-4		3478		621.30		12-24		3485		250.80		12-20		2,954
12-8		3479		3,080		12-30		3486		889.50		12-25		2,567.30
12-10		3480		600		Total				$13,728.70		12-28		2,836
12-17		3481		807.40								12-30		1,025
												12-31		1,690.40
												Total		$17,322.10

The bank statement contained two memoranda:

1.		A credit of $2,330 for the collection of Langer Company of an electronic funds transfer.
2.		A debit for the printing of additional company checks $89.50.

At December 31, the cash balance per books was $14,585.20, and the cash balance per the bank statement was $19,742.60. The bank did not make any errors, but Langer Company made two errors.

_____________________________________________________________

- I have already used the four steps in the reconciliation procedure to prepare a bank reconciliation at December 31.

- I now need to prepare the adjusting entries based on the reconciliation. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 52.75.)

Answer 1

Solution 1:

Vaughn Company
Bank Reconciliation - December 31
Bank's Cash balance		Company's cash balance
Particulars	Amount	Particulars	Amount
Ending balance as per Bank Statements	$19,742.60	Ending Balance as per cash books	$14,585.20
Additions:		Additions:
Outstanding cash receipt	$1,690.40	EFT collection	$2,330.00
Deductions:		Deductions:
Outstanding Checks (Check no 3470, 3474, 3478, 3481, 3484, 3486) ($720.10 + $1,054.50 + $621.30 + $807.40 + $793.50 + $889.50)	$4,886.30	Incorrect recording of deposit ($2,954 - $2,945)	$9.00
		Check printing charges	$89.50
		Incorrect recording of check no 3485	$270.00
Up to date cash balance as per bank	$16,546.70	Up to date cash balance as per books	$16,546.70

Solution 2:

Journal Entries
Date	Particulars	Debit	Credit
31-Dec	Cash Dr	$2,330.00
	To Accounts receivables		$2,330.00
	(To record EFT collection)
31-Dec	Accounts receivables Dr	$9.00
	To Cash		$9.00
	(Correction entry for deposits)
31-Dec	Miscellenous Expenses Dr	$89.50
	To Cash		$89.50
	(Check printing charges debited)
31-Dec	Accounts payable Dr	$270.00
	To Cash		$270.00
	(Correction entry for check no 3485)