The following errors were found when the new accountant at Headlands’s Motors was preparing the April...

The following errors were found when the new accountant at Headlands’s Motors was preparing the April 30 bank reconciliation.

1.		On April 4, Headlands recorded a payment to his airplane motor supplier as $1,590. The correct amount of the cheque recorded by the bank was $1,950.
2.		On April 16, the bank withdrew a cheque from Headlands’s account for $1,395. This cheque was not written by Headlands.
3.		On April 8, Headlands’s daughter made a deposit at the bank for him for $3,250. The bank correctly recorded this deposit. Headlands posted the deposit for collection on accounts as $2,350.
4.		On April 20, the bank recorded a deposit as $3,725. The actual amount of the deposit was $6,725. The bank corrected the error on May 1.
5.		On April 24, the bank recorded cheque #42 for $752 as $725. The cheque had been issued to pay for shop rent. Headlands had correctly recorded the cheque in his books.
6.		On April 28, Headlands recorded a payment for supplies. He posted $3,075 to his books. The correct amount of the cheque recorded by the bank was $2,075.

Describe the impact of each of these items on the bank reconciliation.

	Type of reconciling item	Amount	Journal Entry?
1.	Deduct from the cash balance per booksAdd to the cash balance per bankAdd to the cash balance per booksDeduct from the cash balance per bank	$	YesNo
2.	Deduct from the cash balance per bankAdd to the cash balance per bankDeduct from the cash balance per booksAdd to the cash balance per books	$	YesNo
3.	Add to the cash balance per bankDeduct from the cash balance per booksDeduct from the cash balance per bankAdd to the cash balance per books	$	YesNo
4.	Deduct from the cash balance per bankDeduct from the cash balance per booksAdd to the cash balance per bankAdd to the cash balance per books	$	YesNo
5.	Deduct from the cash balance per bankAdd to the cash balance per bankAdd to the cash balance per booksDeduct from the cash balance per books	$	YesNo
6.	Add to the cash balance per bankDeduct from the cash balance per booksAdd to the cash balance per booksDeduct from the cash balance per bank	$	YesNo

Prepare the necessary journal entries to correct the accounts as you determined above. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the above part.)

Date	Account Titles and Explanation	Debit	Credit
Apr. 4Apr. 8Apr. 16Apr. 20Apr. 24Apr. 28

Apr. 4Apr. 8Apr. 16Apr. 20Apr. 24Apr. 28

Apr. 4Apr. 8Apr. 16Apr. 20Apr. 24Apr. 28

Expert Solution


S. No.	Type of Reconciling Item	Amount
1	Deduct from the cash balance per books	360	(1950-1590)
2	Add to the cash balance per bank	1395
3	Deduct from the cash balance per books	2350
4	Add to the cash balance per bank	3000	(6725-3725)
5	Deduct from the cash balance per bank	27	(752-725)
6	Add to the cash balance per books	1000	(3075-2075)

	Journal entry


DATE	Account NAME	Debit	Credit

Apr. 4	Accounts Payable	360
	cash		360
	(Being rectification done)


Apr. 16	No entry


Apr.8	Accounts Receivable	2350
	Cash		2350
	(Being rectification done)


Apr. 20	No Entry

Apr. 24	No Entry


Apr. 28	Cash	1000
	Supplies		1000
	(Being rectification done)

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ekkarill92 answered 10 months ago

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