Question
In: Accounting
Silver Inc. maintains a checking account with ABC Bank, The following ledger account provides information for...
Silver Inc. maintains a checking account with ABC Bank, The following ledger account provides information for the records related to the beginning balance, deposits, and payments with check. The following cash ledger account is obtained from the company's ledger book for the month ending January 31.
Cash Account
Deposits: Checks written:
Jan.1 Balance $4,851.23 Jan.13 Ck.no. 213 $423
Jan.19 Deposit $5,000 Jan.24 Ck.no. 214 $125
Jan.27 Deposit $2,400 Jan.26 Ck.no.215 $200
Jan.30 Deposit $1,000 Jan.28 Ck.no.216 $163
Jan.31 Deposit $800
The bank statement for the month ended January 31, on the other hand, reveals the following:
Bank Statement
previous statement balance (Beginning balance) $4,851.23
Deposits and other increases :
Jan.19 $5,000
Jan.27 $2,400
Jan.31 $670 INT
Total Deposits and other increases $8,070
Checks paid and other decreases:
Jan.15 Ck.no. 213 $423
Jan.289 Ck.no.216 $136
Jan.30 $20 DM
Total checks paid and other decreases $589
Jan. 31 Balance this statement $12,342.23
Explanation of symbols:
INT Interest earned on average bank balance
DM Debit memoranda
Comparison of the January's bank statement and company records reveal the following additional information:
a) Check No. 216 issued in payment for purchase of merchandise inventory is accurately cleared by the bank but erroneously recorded in the company's accounting books as $163.
b) The debit memoranda represents EFT payment of electricity bill by the bank on behalf of Silver Inc.
What is the unadjusted balance of cash per company records as of January 31?
Solutions
Expert Solution
| Sollution | |||
| Unadjusted balance of cash per company records as of January 31 | |||
| Particulars | Amount | ||
| Balance January 31 as per cash books | $4,851.23 | ||
| Add:-Deposit | |||
| Jan.19 | $5,000.00 | ||
| Jan.27 | $2,400.00 | ||
| Jan.30 | $1,000.00 | ||
| Jan.31 | $800.00 | ||
| Less:-Checks written | |||
| Jan.13 Ck.no. 213 | $423.00 | ||
| Jan.24 Ck.no. 214 | $125.00 | ||
| Jan.26 Ck.no.215 | $200.00 | ||
| Jan.28 Ck.no.216 | $163.00 | ||
| Unadjusted balance of cash per company | $13,140.23 | ||
| Silver Inc. | |||
| Bank Reconciliation -January 31 | |||
| Bank's Cash balance | Company's cash balance | ||
| Particulars | Amount | Particulars | Amount |
| Balance January 31 as per bank statement | $12,342.23 | Balance January 31 as per cash books | $13,140.23 |
| Additions: | Additions: | ||
| Outstanding Deposits($1000+$800) | $1,800.00 | interest | $670.00 |
| Error ($163-$136) | $27.00 | ||
| Deductions: | Deductions: | ||
| Outstanding Checks(Ck.no. 214 -$125 & Ck.no.215 $200 ) | $325.00 | Electricity payment | $20.00 |
| Adjusted Bank Balance | $13,817.23 | Adjusted Book balance | $13,817.23 |
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