Question

Beeler Furniture Company deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement as of June 30, 20Y2, have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account.

CASH ACCOUNT:
Balance as of June 1	$9,317.40
CASH RECEIPTS FOR MONTH OF JUNE	$9,223.76

DUPLICATE DEPOSIT TICKETS: Date and amount of each deposit in June:

Date	Amount		Date	Amount		Date	Amount
June 1	$1,080.50		June 10	$996.61		June 22	$897.34
3	854.17		15	882.95		24	947.21
8	840.50		17	1,606.74		30	1,117.74

CHECKS WRITTEN: Number and amount of each check issued in June:

Check No.	Amount		Check No.	Amount		Check No.	Amount
740	$237.50		747	Void		754	$449.75
741	495.15		748	$450.90		755	272.75
742	501.90		749	640.13		756	113.95
743	761.30		750	276.77		757	407.95
744	506.88		751	299.37		758	259.60
745	117.25		752	537.01		759	901.50
746	298.66		753	380.95		760	486.39

Total amount of checks issued in June: $8,395.66

1. Prepare a bank reconciliation as of June 30, 20Y2. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Round your answers to two decimal places. (Note: For those boxes in which you must enter subtracted or negative numbers use a minus sign. )

2. Journalize the necessary entries. Refer to the Chart of Accounts for exact wording of account titles. Round your answers to two decimal places.

4. Assume that a canceled check for $390 has been incorrectly recorded by the bank as $930. Select how the error would be included in a bank reconciliation and how it should be corrected.

Treatment:

Deduction from cash per bank statement

Addition to cash per bank statement

Not included in a bank reconciliation

Deduction from cash per company’s records

Addition to cash per company’s records

To correct:

Journalize an entry adding $540 to cash

Journalize an entry deducting $930 from cash

Journalize a correcting entry adding $930 to cash

Deduct from the amount of bank service charges

Request that the bank correct the error

Journalize an entry deducting $540 from cash

Amount Descriptions
Adjusted balance
Check returned because of insufficient funds
Deposit of June 30, not recorded by bank
Error in recording Check No. 743
Error in recording June 10 deposit
Error in recording June 24 deposit
Interest
Principal
Proceeds of note collected by bank: Principal
Proceeds of note collected by bank: Interest
Service charges
Total adjustments
Outstanding Check No. 738
Outstanding Check No. 756
Outstanding Check No. 758
Outstanding Check No. 759

Answer 1

	Beeler Furniture Company
	Bank Reconciliation
	June 30, 20Y2
	Cash balance according to banks statement		13,624.71
	Add: Deposit of June 30, not recorded by bank		1,117.74
			14,742.45
	Deduct: Outstanding checks
	Outstanding Check No. 738	251.40
	Outstanding Check No. 756	113.95
	Outstanding Check No. 758	259.60
	Outstanding Check No. 759	901.50	1,526.45
	Adjusted balance		13,216.00
	Cash balance according to company's records		10,145.50
	Add: Proceeds from note collected by bank
	Principal	3,500.00
	Interest	210.00
	Error in recording check no. 743	90.00	3,800.00
			13,945.50
	Deduct: Check returned because of insufficient funds	550.00
	Error in recording June 10 deposit	100.00
	Error in recording June 24 deposit	4.50
	Service charges	75.00	729.50
	Adjusted balance		13,216.00
	Working
	Balance per cash in bank account, June 1	9,317.40
	Add: June receipts	9,223.76
	Deduct: June disbursements	(8,395.66)
	Balance per cash in bank account, June 30	10,145.50
2
	General Journal	Debit	Credit
	Cash	3,800.00
	Note Receivable		3,500.00
	Interest Revenue		210.00
	Accounts Payable		90.00
	Sales	104.50
	Accounts Receivable	550.00
	Miscellaneous Expense	75.00
	Cash		729.50