In: Accounting
E5-8 Prepare bank reconciliation and adjustments. | ||||||||||||
The following information pertains to Lance Company. | ||||||||||||
1. | Cash balance per bank, July 31, $7,328. | |||||||||||
2. | July bank service charge not recorded by the depositor $38. | |||||||||||
3. | Cash balance per books, July 31, $7,364. | |||||||||||
4. | Deposits in transit, July 31, $2,700. | |||||||||||
5. | $2,016 collected for Lance Company in July by the bank through electronic funds transfer. | |||||||||||
The collection has not been recorded by Lance Company. | ||||||||||||
6. | Outstanding checks, July 31, $686. | |||||||||||
Instructions | ||||||||||||
(a) | Prepare a bank reconciliation at July 31, 2017. | |||||||||||
(b) | Prepare a tabular analysis for the adjustments at July 31 on the books of Lance | |||||||||||
Company. Use the following column headings: Cash, Accounts Receivable, Revenues, | ||||||||||||
and Expenses. Include margin explanations for the changes in revenues and expenses. | ||||||||||||
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" . | ||||||||||||
(a) | LANCE COMPANY | |||||||||||
Bank Reconciliation | ||||||||||||
July 31, 2017 | ||||||||||||
Cash balance per bank statement | Value | |||||||||||
Add: Deposits in transit | Value | |||||||||||
? | ||||||||||||
Less: Outstanding checks | Value | |||||||||||
Adjusted cash balance per bank | ? | |||||||||||
Cash balance per books | Value | |||||||||||
Add: Collection of note receivable | Value | |||||||||||
? | ||||||||||||
Less: Bank service charge | Value | |||||||||||
Adjusted cash balance per books | ? | |||||||||||
Stockholders' Equity | ||||||||||||
(b) | Assets | = | Liabilities | + | Account | |||||||
Cash + | Accts. Rec. | = | + Revenues | -Expenses | ||||||||
July 31 | Value | Value | ||||||||||
31 | Value | Value | Text | |||||||||
After you have completed E5-8, consider the following additonal question. | ||||||||||||
1. | Assume that deposit in transit, outstanding checks and cash balance per books changed to | |||||||||||
$3,600, $886 and $8,064 respectively. Show the impact of these changes on the bank | ||||||||||||
reconciliation. | ||||||||||||
SOLVE FOR MISSING VALUES , CASH , LIABILITIES, STOCK HOLDERS EQUITY AND QUESTION 1 |
The missing values of liabilities, stock holders' equity and accounts receivable can not be determined without more information.