Bank Reconciliation and Entries The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $17,750. The bank statement indicated a balance of $33,650 on July 31, 20Y5. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items: Checks outstanding totaled $17,865. A deposit of $
Bank Reconciliation and Entries
The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $17,750. The bank statement indicated a balance of $33,650 on July 31, 20Y5. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items:
- Checks outstanding totaled $17,865.
- A deposit of $9,150, representing receipts of July 31, had been made too late to appear on the bank statement.
- The bank had collected $6,095 on a note left for collection. The face of the note was $5,750.
- A check for $390 returned with the statement had been incorrectly recorded by Stone Systems as $930. The check was for the payment of an obligation to Holland Co. for the purchase of office supplies on account.
- A check drawn for $1,810 had been incorrectly charged by the bank as $1,180.
- Bank service charges for July amounted to $80.
Required:
1. Prepare a bank reconciliation.
| Stone Systems | ||
| Bank Reconciliation | ||
| July 31, 20Y5 | ||
| Cash balance according to bank statement | $ fill in the blank | |
| Add: Deposit in transit on July 31 | fill in the blank | |
| Deduct: Outstanding checks | $ fill in the blank | |
| Deduct: Bank error in charging check as $1,180 instead of $1,810 | fill in the blank | |
| Total deductions | fill in the blank | |
| Adjusted balance | $ fill in the blank | |
| Cash balance according to company's records | $ fill in the blank | |
| Adjustments: | ||
| Add: Note collected by the bank, including $345 interest | $fill in the blank | |
| Add: Error in recording check by Stone Systems | fill in the blank | |
| Total additions: | fill in the blank | |
| Deduct: Bank service charges | fill in the blank | |
| Adjusted balance | $ fill in the blank |
1. Set up two sections: one for the company cash account section and the other for the bank balance section. Determine the effect of the data on each section. Recall that when you are finished, the adjusted balances in the bank and company sections of the reconciliation must be equal. If not, an item has been overlooked or treated in error.
Recall that the company's cash account balance is updated for any items in the company section of the bank reconciliation.
2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. If an amount box does not require an entry, leave it blank.
| 20Y5 July 31 | fill in the blank 906207f61fe2039_2 | fill in the blank 906207f61fe2039_3 | |
| fill in the blank 906207f61fe2039_5 | fill in the blank 906207f61fe2039_6 | ||
| fill in the blank 906207f61fe2039_8 | fill in the blank 906207f61fe2039_9 | ||
| fill in the blank 906207f61fe2039_11 | fill in the blank 906207f61fe2039_12 | ||
| July 31 | fill in the blank 906207f61fe2039_14 | fill in the blank 906207f61fe2039_15 | |
| fill in the blank 906207f61fe2039_17 | fill in the blank 906207f61fe2039_18 |
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