$12,435.00 rather than the correct amount of $21,435.00 After asking the intern to search for other errors by comparing her reconciliation to prior bank reconciliations prepared by the former accountant, you work together to compute the corrected adjusted balance. Round your answer to two decimal places. Corrected adjusted balance amount:
$12,435.00 rather than the correct amount of $21,435.00 After asking the intern to search for other errors by comparing her reconciliation to prior bank reconciliations prepared by the former accountant, you work together to compute the corrected adjusted balance. Round your answer to two decimal places. Corrected adjusted balance amount:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
All one question. Thank you.
![**Bank Reconciliation**
*The company's accounting intern has prepared the end-of-January bank reconciliation from the bank statement and is worried because the adjusted balance amounts do not agree. After reviewing the bank reconciliation, scroll down for the next steps in helping the intern.*
### Murdstone, Inc.
**Bank Reconciliation**
*January 31, 20YS*
- **Cash balance according to bank statement:** $23,557.98
**Adjustments:**
- **Add: Deposit in transit on January 31** $12,125.25
- **Deduct: Outstanding Check No. 124** $(62.00)
- **Outstanding Check No. 125** $(7.00)
- **Outstanding Check No. 129** $(1,250.00)
**Total deductions** $(1,369.00)
**Adjusted Balance:** $34,314.23
---
- **Cash balance according to Murdstone, Inc.:** $51,545.88
**Adjustments:**
- **Add: Note and interest collected by bank** $15,250.75
- **Deduct:**
- **Check returned because of insufficient funds** $(23,475.40)
- **Bank service charge** $(250.00)
- **Error in recording Check No. 123** $(9,000.00)
**Total deductions** $(32,725.40)
**Adjusted Balance:** $34,071.23
---
*You assist the intern to check source documents and find that most of the dollar amounts are correct; however, two dollar amounts are incorrect. After reviewing the following table, scroll down for the next steps in helping the intern.*
| **Item** | **Correct in Intern's Reconciliation?** | **If "No," Corrected Amount** |
|----------------------------------------------|----------------------------------------|-------------------------------|
| Cash balance according to bank statement | Yes | |
| Deposit in transit on January 31 | Yes | |
| Outstanding Check No. 124 | Yes | |
| Outstanding Check No. 125 | No | $75.00 |
| Outstanding Check No. 129 | Yes | |
| Cash balance according to Murdstone, Inc. | Yes | |
| Check returned because of insufficient funds | Yes | |
| Note and interest collected by bank |](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb372ec47-ee36-4baa-b365-e8b0e97a6c99%2F9b3782d7-ca67-41f2-8ca4-e0d3d26612f0%2F5hne4c_processed.png&w=3840&q=75)
Transcribed Image Text:**Bank Reconciliation**
*The company's accounting intern has prepared the end-of-January bank reconciliation from the bank statement and is worried because the adjusted balance amounts do not agree. After reviewing the bank reconciliation, scroll down for the next steps in helping the intern.*
### Murdstone, Inc.
**Bank Reconciliation**
*January 31, 20YS*
- **Cash balance according to bank statement:** $23,557.98
**Adjustments:**
- **Add: Deposit in transit on January 31** $12,125.25
- **Deduct: Outstanding Check No. 124** $(62.00)
- **Outstanding Check No. 125** $(7.00)
- **Outstanding Check No. 129** $(1,250.00)
**Total deductions** $(1,369.00)
**Adjusted Balance:** $34,314.23
---
- **Cash balance according to Murdstone, Inc.:** $51,545.88
**Adjustments:**
- **Add: Note and interest collected by bank** $15,250.75
- **Deduct:**
- **Check returned because of insufficient funds** $(23,475.40)
- **Bank service charge** $(250.00)
- **Error in recording Check No. 123** $(9,000.00)
**Total deductions** $(32,725.40)
**Adjusted Balance:** $34,071.23
---
*You assist the intern to check source documents and find that most of the dollar amounts are correct; however, two dollar amounts are incorrect. After reviewing the following table, scroll down for the next steps in helping the intern.*
| **Item** | **Correct in Intern's Reconciliation?** | **If "No," Corrected Amount** |
|----------------------------------------------|----------------------------------------|-------------------------------|
| Cash balance according to bank statement | Yes | |
| Deposit in transit on January 31 | Yes | |
| Outstanding Check No. 124 | Yes | |
| Outstanding Check No. 125 | No | $75.00 |
| Outstanding Check No. 129 | Yes | |
| Cash balance according to Murdstone, Inc. | Yes | |
| Check returned because of insufficient funds | Yes | |
| Note and interest collected by bank |
![# Accounting for Cash and Petty Cash at Murdstone, Inc.
Welcome to your new role as an accountant at Murdstone, Inc., a supplier of arts and crafts. As you step into this position, you'll be tasked with updating the company's January accounting records, with a focus on cash accounts.
## Cash Short and Over
The controller has completed the T accounts for cash and sales accounts as of January 30. Your task is to prepare the T account for the cash short and over account. The company operates with a single bank account labeled as "Cash."
*### Cash T Account:*
- **Balance 1/1:** 5,500
- **1/5:** 2,850
- **1/12:** 6,225
- **1/23:** 3,370
- **1/30:** 4,450
- **Balance:** 21,825
*### Sales T Account:*
- **Balance 1/1:** 0
- **1/5:** 2,855
- **1/12:** 6,225
- **1/23:** 3,330
- **1/30:** 4,400
- **Balance:** 16,810
Review the preceding T accounts and complete the cash short and over T account below.
*### Cash Short and Over T Account:*
- **Balance 1/1:** [Space for entry]
- **Activities:** [Dropdowns for entry]
- **Balance:** [Space for entry]
**Discussion Question:**
What will happen to the ending balance in the cash short and over account at the end of the accounting period?
---
## Petty Cash
A check was issued on January 2 to establish a petty cash fund of $500. By January 31, the petty cash fund balance was $440. To replenish the fund, refer to these receipts:
*### Petty Cash Receipts:*
- **Office Supplies:** $30
- **Miscellaneous Administrative Expense:** $23
The company records any missing funds in the cash short and over account. The intern prepared this journal entry to replenish the petty cash fund:
- **Date:** Jan. 31
- **Description:** Petty Cash Debit $53, Cash Credit $53
Prepare for a discussion by journaling the correct replenishment entry for the petty cash fund.
*### Replenishment Entry:*
- **Date](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb372ec47-ee36-4baa-b365-e8b0e97a6c99%2F9b3782d7-ca67-41f2-8ca4-e0d3d26612f0%2Fgujqu339_processed.png&w=3840&q=75)
Transcribed Image Text:# Accounting for Cash and Petty Cash at Murdstone, Inc.
Welcome to your new role as an accountant at Murdstone, Inc., a supplier of arts and crafts. As you step into this position, you'll be tasked with updating the company's January accounting records, with a focus on cash accounts.
## Cash Short and Over
The controller has completed the T accounts for cash and sales accounts as of January 30. Your task is to prepare the T account for the cash short and over account. The company operates with a single bank account labeled as "Cash."
*### Cash T Account:*
- **Balance 1/1:** 5,500
- **1/5:** 2,850
- **1/12:** 6,225
- **1/23:** 3,370
- **1/30:** 4,450
- **Balance:** 21,825
*### Sales T Account:*
- **Balance 1/1:** 0
- **1/5:** 2,855
- **1/12:** 6,225
- **1/23:** 3,330
- **1/30:** 4,400
- **Balance:** 16,810
Review the preceding T accounts and complete the cash short and over T account below.
*### Cash Short and Over T Account:*
- **Balance 1/1:** [Space for entry]
- **Activities:** [Dropdowns for entry]
- **Balance:** [Space for entry]
**Discussion Question:**
What will happen to the ending balance in the cash short and over account at the end of the accounting period?
---
## Petty Cash
A check was issued on January 2 to establish a petty cash fund of $500. By January 31, the petty cash fund balance was $440. To replenish the fund, refer to these receipts:
*### Petty Cash Receipts:*
- **Office Supplies:** $30
- **Miscellaneous Administrative Expense:** $23
The company records any missing funds in the cash short and over account. The intern prepared this journal entry to replenish the petty cash fund:
- **Date:** Jan. 31
- **Description:** Petty Cash Debit $53, Cash Credit $53
Prepare for a discussion by journaling the correct replenishment entry for the petty cash fund.
*### Replenishment Entry:*
- **Date
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