Question

On arriving his office at Efficient Systems Inc.(ESI) early morning Monday, Mr. Laziross w Mr. Terribeel asked him why the company's cash balance was different from the checking Mr. Laziross listed the following items to explain the difference. 1 The bank statement for the checking account of ESI showed a balance of $14632.12 on S 2 Oustanding checks were $1,320.25 3 The September 30 cash receipts of $575 were not deposited in the bank until October 2. 4 One check written in payment of rent for $246 was not correctly recorded by the bank but 5 In accordance with prior authorization, the bank withdrew $450 directly from checking account as payment on note payable. The interest portion of that payment was 6 Bank service charge of $14 were listed on the bank statement. 7 A deposit of $875 was recorded by the bank on September 13, but it did not belong to ESI. 8 The bank statement included a charge of $85 for an NSF check. The check was returned 9 ESI maintains a $200 petty cash fund that was approrpiately reimbursed at the end of Sept 10 According to instructions from ESI on September 30, the bank withdrew $10,000 from the ESI recorded the transaction in its books on September 30 when it received notice from th Prepare the adjustment of Book balance to Corrected Balance. Correct Adjustments: Balance per book Dr.

Answer 1

Solution:

Balance Bank Statement   14,632.12     
Deposits outstanding   575     
Checks outstanding   -1320.25     
Error recording rent check   -18     
Automatic mortgage payment   450     
Bank Service charge   14     
Account error   -875     
NSF check charge   85     
Balance per books   13,542.87     
         
         
Balance Bank Statement   14,632.12     
Deposits outstanding   575     
Account error   -875     
Checks outstanding   -1320.25     
Correct Cash Balance   13,011.87     
         
Book Balance   13,542.87     
Error on rent   18     
Automatic mortgage payment   -450     
Bank Service charge   -14     
NSF   -85     
   13,011.87     
  
Particulars   Debit   Credit     
Cash   18         
Rent expense       18     
             
Interest expense   350         
Note payable   100         
Bank service charges   14         
NSF   85         
Cash       549