Answered: a. Prepare a bank reconciliation,…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter8: Sarbanes-oxley, Internal Control, And Cash

Section: Chapter Questions

Problem 18E

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Bank Reconciliation The following data were accumulated for use in reconciling the bank account of Nakajima Co. for July: 1 Cash balance according to the company's records at July 31, $24,640. 2 Cash balance according to the bank statement at July 31, $25,940. 3 Checks outstanding, $5,000. 4 Deposit in transit, not recorded by bank, $4,020. 5 A check for $590 issued in payment of an account was erroneously recorded in the check register as $950. 6 Bank debit memo for service charges, $40. a. Prepare a bank reconciliation, using the format shown in Exhibit 12. Nakajima Co. Bank Reconciliation July 31 Cash balance according to bank statement $ fill in the blank 253cf5010032f9d_1 fill in the blank 253cf5010032f9d_3 fill in the blank 253cf5010032f9d_5 Adjusted balance $ fill in the blank 253cf5010032f9d_6 Cash balance according to company's records $ fill in the blank 253cf5010032f9d_7 fill in the blank 253cf5010032f9d_9 fill in the blank 253cf5010032f9d_11 Adjusted balance $ fill in the blank 253cf5010032f9d_12 b. If the balance sheet is prepared for Nakajima Co. on July 31, what amount should be reported for cash? $ fill in the blank 47cf9ffb006106a_1 c. Must a bank reconciliation always balance (reconcile)?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Step 1

Nakajima Co. Bank Reconciliation July 31

Cash balance according to the bank statement $25,940

Add: Deposit in transit $4,020

Deduct : Outstanding checks $5,000

Adjusted Balance $24,960

Cash balance according to the company's records $24,640

Add : Error on check $360

Deduct: Service charges $40

Adjusted Balance $24,960

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