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 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

BANK RECONCILIATION FOR PRECEDING MONTH:

BEELER FURNITURE COMPANY

Bank Reconciliation

May 31, 20Y2

1	Cash balance according to bank statement		$9,447.20
2	Add deposit for May 31, not recorded by bank		690.25
3	Deduct outstanding checks:
4	No. 731	$162.15
5	No. 736	345.95
6	No. 738	251.40
7	No. 739	60.55	(820.05)
8	Adjusted balance		$9,317.40
9
10	Cash balance according to company’s records		$9,352.50
11	Deduct bank service charges		(35.10)
12	Adjusted balance		$9,317.40

JUNE BANK STATEMENT:

Click here to view.

	Required:
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. Be sure to complete the statement heading. Refer to the Instructions, Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. To enter the Check number, please enter “No.” preceeding the number. “Deduct”, “Add”, or colons (:) will automatically appear if required. Enter all amounts as positive numbers. Round your answers to two decimal places.
2.	Journalize the necessary entries. The accounts have not been closed. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Round your answers to two decimal places.
3.	What is the amount of Cash that should appear on the balance sheet as of June 30?
4.	Assume that a canceled check for $390 has been incorrectly recorded by the bank as $930. Briefly explain how the error would be included in a bank reconciliation and how it should be corrected.

Answer 1

1.	BEELER FURNITURE COMPANY
	Bank Reconciliation
	June 30, 20Y2
		Cash balance according to bank statement				$13,624.71
		Add:	Deposit of June 30, not recorded by bank				1,117.74
		Subtotal				$14,742.45
		Deduct outstanding checks:
			No. 738		$ 251.40
			No. 756		113.95
			No. 758		259.60
			No. 759		901.50		1,526.45
		Adjusted balance				$13,216.00
		Cash balance according to company's records				$10,145.50
		Add:	Proceeds of note collected by bank, including interest		$ 3,710.00
			Error in recording check		90.00		3,800.00
		Subtotal				$13,945.50
		Deduct:	Check returned due to insufficient funds		$ 550.00
			Error in recording June 10 deposit		100.00
			Bank service charges		75.00
			Error in recording June 24 deposit		4.50		729.50
		Adjusted balance				$13,216.00
2.
			Cash		3,800.00
			Notes Receivable				3,500.00
			Interest Revenue				210.00
			Accounts Payable				90.00
			Accounts Receivable		550.00
			Sales		104.50
			Miscellaneous Expense		75.00
			Cash				729.50
3.
			Amount to be reported as cash on the June 30 balance sheet	$13,216.00

4.

The error of $540 ($930 - $390) in the canceled check should be added to the "balance according to bank statement" on the bank reconciliation. The canceled check should be presented to the bank with a request that the bank balance be corrected.