80.2K

Verified Solution

Link Copied!

Bank Reconciliation and Entries

Sunshine Interiors 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 July 31, 20Y0, 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 July 1			$ 9,578.00
CASH RECEIPTS FOR MONTH OF JULY			6,465.42

DUPLICATE DEPOSIT TICKETS:
Date and amount of each deposit in July:
Date		Amount		Date		Amount		Date		Amount
July 2		$569.50		July 12		$580.70		July 23		$ 713.45
5		701.80		16		600.10		26		601.50
9		819.24		19		701.26		31		1,177.87

CHECKS WRITTEN:
Number and amount of each check issued in July:
Check No.		Amount		Check No.		Amount		Check No.		Amount
614		$243.50		621		$309.50		628		$837.70
615		350.10		622		Void		629		329.90
616		279.90		623		Void		630		882.80
617		395.50		624		707.01		631		1,081.56
618		435.40		625		158.63		632		325.40
619		320.10		626		550.03		633		310.08
620		238.87		627		381.73		634		241.71
Total amount of checks issued in July										$8,379.42

BANK RECONCILIATION FOR PRECEDING MONTH:

Sunshine Interiors
Bank Reconciliation
June 30, 20Y0
Cash balance according to bank statement				$9,422.80
Adjustments:
Deposit of June 30 not recorded by bank		$780.80
Outstanding Check No. 580		($310.10)
Outstanding Check No. 602		(85.50)
Outstanding Check No. 612		(92.50)
Outstanding Check No. 613		(137.50)
Total adjustments				155.20
Adjusted balance				$9,578.00
Cash balance according to company's records				$9,605.70
Adjustments:
Bank service charges				(27.70)
Adjusted balance				$9,578.00

Click here to see JULY BANK STATEMENT.

Required:

1. Prepare a bank reconciliation as of July 31. 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. When required, enter amounts in dollars and cents.

Sunshine Interiors
Bank Reconciliation
July 31, 20Y0
Cash balance according to bank statement		$
Adjustments:
Total adjustments
Adjusted balance		$
Cash balance according to company's records		$
Adjustments:
Total adjustments
Adjusted balance		$

2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. When required, enter amounts in dollars and cents. For a compound transaction, if an amount box does not require an entry, leave it blank.

a. 20Y0 July 31
b. July 31

3. What is the amount of Cash that should appear on the balance sheet as of July 31? $

4. Assume that a canceled check for $180 has been incorrectly recorded by the bank as $1,800. Select how the error would be included in a bank reconciliation and how it should be corrected.

Treatment
To correct

STATEMENT: 1 AB MEMBER FDIC PAGE AMERICAN NATIONAL BANK ACCOUNT NUMBER OF DETROIT FROM 7/01/20YOTO 7/31/2010 DETROIT, MI 48201-2500 (313) 933-8547 BALANCE 9,422.80 9 DEPOSITS 6,086.36 20 WITHDRAWALS 7,656.74 SUNSHINE INTERIORS 4 OTHER DEBITS AND CREDITS 3,749.00CR NEW BALANCE 11,601.41 -----CHECKS AND OTHER DEBITS DEPOSITS - + - DATE - +- BALANCE No. 580 310.10 No. 612 92.50 780.80 07/01 9,801.00 No. 602 88.30 No. 614 243.80 569.50 07/03 10,041.50 No. 615 350.10 NO. 616 279.90 701.80 07/06 10,113.30 No. 617 396.50 No. 618 435.40 819.24 07/11 10,101.64 No. 619 320.10 NO. 620 238.87 580.70 07/13 10,123.37 NO OR1 309.50 NO. 624 707.01 MB 4,000.00 07/14 13,106.86 NO. 628 158.63 NO. 626 550.08 MS 160.00 07/14 12,558.20 NO. 627 318.73 NO. 620 329.90 600.10 09/17 12,809.67 NO. 630882.80 NO. 631 1,081.56 NSP 375.00 07/20 10,170.31 NO. 682 328.40 NO. 634 241.71 701.26 07/21 10,304.46 731.45 07/24 11,035.91 801.50 07/28 11,637.41 SC 36.00 07/31 11,801.41 EC ERROR CORRECTION OD - OVERDRAFT MS MISCELLANEOUS PS PAYMENT STOPPED NSF NOT SUFFICIENT FUNDS 8C SERVICE CHARGE THE RECONCILEMENT OF THIS STATEMENT WITH YOUR RECORDS IS ESSENTIAL ANY ERROR OR EXCEPTION SHOULD BE REPORTED IMMEDIATELY

Answer & Explanation Solved by verified expert

See Answer