Question

In: Accounting

On August 31, 2019, the balance in the checkbook and the Cash account of the Dry...

On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,343. The balance shown on the bank statement on the same date was $13,232. Notes The firm’s records indicate that a $1,520 deposit dated August 30 and a $708 deposit dated August 31 do not appear on the bank statement. A service charge of $7 and a debit memorandum of $355 covering an NSF check have not yet been entered in the firm’s records. (The check was issued by Art Corts, a credit customer.) The following checks were issued but have not yet been paid by the bank: Check 712, $ 117 Check 713, $ 132 Check 716, $ 245 Check 736, $ 584 Check 739, $ 85 Check 741, $ 127 A credit memorandum shows that the bank collected a $2,119 note receivable and interest of $70 for the firm. These amounts have not yet been entered in the firm’s records. Required: Prepare a bank reconciliation statement for the firm as of August 31. Record general journal entries for items on the bank reconciliation statement that must be journalized. Analyze: What effect did the journal entries recorded as a result of the bank reconciliation have on the fundamental accounting equation?

Solutions

Expert Solution

1] BANK RECONCILIATION STATEMENT
Balance per bank $       13,232
Add:
Deposits in transit [1520+708] $          2,228 $         2,228
$       15,460
Deduct:
Outstanding checks [117+132+245+584+85+127] $          1,290 $         1,290
Adjusted balance $       14,170
Balance per books $       12,343
Add:
Note collected by bank $          2,119
Interest on note $                70
$         2,189
Deduct: $       14,532
Bank charges $                  7
NSF check $              355 $ 362
Adjusted balance $       14,170
2] JOURNAL ENTRIES:
a] Cash $          2,189
Interest income $ 70
Notes receivable $         2,119
b] Bank charges $                  7
Cash $ 7
c] Accounts receivable [for NSF check] $              355
Cash $             355
3] Effect on the accounting equation:
a] Assets will increase to the extent of = 2189-2119 = $                70
Retained earnings will also increase to the extent of   $                70
b] Retained earnings will decrease to the extent of   $                  7
Assets will decrease to the extent of $                  7
c] There will no effect on the equation as cash will
decrease and accounts receivable will increase to the
extent of $355.

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

On August 31, 2019, the balance in the checkbook and the Cash account of the Dry...
On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,236. The balance shown on the bank statement on the same date was $13,172. Notes The firm’s records indicate that a $1,400 deposit dated August 30 and a $696 deposit dated August 31 do not appear on the bank statement. A service charge of $8 and a debit memorandum of $295 covering an NSF check have not yet been...
On August 31, 2019, the balance in the checkbook and the Cash account of the Dry...
On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,981. The balance shown on the bank statement on the same date was $13,897. Notes The firm’s records indicate that a $1,500 deposit dated August 30 and a $701 deposit dated August 31 do not appear on the bank statement. A service charge of $8 and a debit memorandum of $270 covering an NSF check have not yet been...
On August 31, 2019, the balance in the checkbook and the Cash account of the Dry...
On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,300. The balance shown on the bank statement on the same date was $13,207. Notes The firm’s records indicate that a $1,470 deposit dated August 30 and a $703 deposit dated August 31 do not appear on the bank statement. A service charge of $9 and a debit memorandum of $330 covering an NSF check have not yet been...
On August 31, 2019, the balance in the checkbook and the Cash account of the Dry...
On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,362. The balance shown on the bank statement on the same date was $13,242. Notes The firms records indicate that a $1,540 deposit dated August 30 and a $710 deposit dated August 31 do not appear on the bank statement. A service charge of $8 and a debit memorandum of $365 covering an NSF check have not yet been...
On August 31, 2019, the balance in the checkbook and the Cash account of the Dry...
On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,253. The balance shown on the bank statement on the same date was $13,182. Notes The firm’s records indicate that a $1,420 deposit dated August 30 and a $698 deposit dated August 31 do not appear on the bank statement. A service charge of $7 and a debit memorandum of $305 covering an NSF check have not yet been...
On August 31, 2019, the balance in the checkbook and the Cash account of the Dry...
On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,327. The balance shown on the bank statement on the same date was $13,222. Notes The firm’s records indicate that a $1,500 deposit dated August 30 and a $706 deposit dated August 31 do not appear on the bank statement. A service charge of $9 and a debit memorandum of $345 covering an NSF check have not yet been...
On August 31, 2019, the balance in the checkbook and the Cash account of the Dry...
On August 31, 2019, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,370. The balance shown on the bank statement on the same date was $13,247. Notes The firm’s records indicate that a $1,550 deposit dated August 30 and a $711 deposit dated August 31 do not appear on the bank statement. A service charge of $7 and a debit memorandum of $370 covering an NSF check have not yet been...
On August 31, 20X1, the balance in the checkbook and the Cash account of the Dry...
On August 31, 20X1, the balance in the checkbook and the Cash account of the Dry Creek Bed and Breakfast was $12,263. The balance shown on the bank statement on the same date was $13,187. Notes The firms records indicate that a $1,430 deposit dated August 30 and a $699 deposit dated August 31 do not appear on the bank statement. A service charge of $8 and a debit memorandum of $310 covering an NSF check have not yet been...
The balance in the Colt Company's Cash account on August 31 was $19,700, before the bank...
The balance in the Colt Company's Cash account on August 31 was $19,700, before the bank reconciliation was prepared. After examining the August bank statement and items included with it, the company's accountant found: Checks outstanding $4,300 Check from customer returned NSF 140 Note collected by bank for the Colt Company 1,200 Deposits outstanding 1,800 Bank service fees 60 What is the amount of cash that should be reported in the balance sheet as of August 31? rev: 02_28_2019_QC_CS-161029 A)$22,200....
The cash account for Corey’s Construction Company at August 31, 2020, indicated a book balance of...
The cash account for Corey’s Construction Company at August 31, 2020, indicated a book balance of $19,885. The bank statement received by the company indicated a balance of $39,473.63 as at August 31, 2020. A comparison of the bank statement and the accompanying cancelled cheques and memos with the records revealed the following: A deposit of $6,794.62 was received by the bank on August 31 after the bank statement was prepared. Cheques #251 for $1,200 and #260 for $1,333.25 were...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT