e cash account for Deaver Consulting at October 31, 20Y6, indicated a balance of $7,735. The bank statement indicated a balance of $9,930 on October 31, 20Y6. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: Checks outstanding totaled $3,570. A deposit of $3,720, representing receipts from October 31, had been made too late to appear on the bank statement. The bank had collected $1,940 on a note left for collection. The face of the note was $1,840. A check for $550 returned with the statement had been incorrectly recorded by Deaver Consulting as $500. The check was for the payment of an obligation to Oxford Office Supplies Co. for the purchase of office supplies on account. A check drawn for $530 had been incorrectly charged by the bank as $30. Bank service charges for October amounted to $45.
e cash account for Deaver Consulting at October 31, 20Y6, indicated a balance of $7,735. The bank statement indicated a balance of $9,930 on October 31, 20Y6. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: Checks outstanding totaled $3,570. A deposit of $3,720, representing receipts from October 31, had been made too late to appear on the bank statement. The bank had collected $1,940 on a note left for collection. The face of the note was $1,840. A check for $550 returned with the statement had been incorrectly recorded by Deaver Consulting as $500. The check was for the payment of an obligation to Oxford Office Supplies Co. for the purchase of office supplies on account. A check drawn for $530 had been incorrectly charged by the bank as $30. Bank service charges for October amounted to $45.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Bank Reconciliation and Entries
The cash account for Deaver Consulting at October 31, 20Y6, indicated a balance of $7,735. The bank statement indicated a balance of $9,930 on October 31, 20Y6. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:
- Checks outstanding totaled $3,570.
- A deposit of $3,720, representing receipts from October 31, had been made too late to appear on the bank statement.
- The bank had collected $1,940 on a note left for collection. The face of the note was $1,840.
- A check for $550 returned with the statement had been incorrectly recorded by Deaver Consulting as $500. The check was for the payment of an obligation to Oxford Office Supplies Co. for the purchase of office supplies on account.
- A check drawn for $530 had been incorrectly charged by the bank as $30.
- Bank service charges for October amounted to $45.
Instructions:
1. Prepare a bank reconciliation.
| Deaver Consulting | ||
| Bank Reconciliation | ||
| October 31, 20Y6 | ||
| Cash balance according to bank statement | $fill in the blank aeb3ecfb0fe7fa6_1 | |
| Add: Deposit of October 31, not recorded by bank | fill in the blank aeb3ecfb0fe7fa6_3 | |
| $fill in the blank aeb3ecfb0fe7fa6_4 | ||
| Deduct: Outstanding checks | $fill in the blank aeb3ecfb0fe7fa6_6 | |
| Deduct: Bank error in charging check as $30 instead of $530 | fill in the blank aeb3ecfb0fe7fa6_8 | fill in the blank aeb3ecfb0fe7fa6_9 |
| Adjusted balance | $fill in the blank aeb3ecfb0fe7fa6_10 | |
| Cash balance according to Deaver Consulting | $fill in the blank aeb3ecfb0fe7fa6_11 | |
| Add: Proceeds of note collected by bank, including $100 interest | fill in the blank aeb3ecfb0fe7fa6_13 | |
| $fill in the blank aeb3ecfb0fe7fa6_14 | ||
| Deduct: Error in recording check by the company as $500 instead of $550 | $fill in the blank aeb3ecfb0fe7fa6_16 | |
| Deduct: Bank service charges | fill in the blank aeb3ecfb0fe7fa6_18 | fill in the blank aeb3ecfb0fe7fa6_19 |
| Adjusted balance | $fill in the blank aeb3ecfb0fe7fa6_20 |
Transcribed Image Text:2. Illustrate the effects on the accounts and financial statements of the bank reconciliation. If no account or activity is affected, select "No effect" from the dropdown and leave the
corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.
Increases to Cash:
Balance Sheet
Assets
Liabilities
Stockholders' Equity
Cash
Notes Receivable
No Effect
Retained Earnings
Oct. 31
Statement of Cash Flows
Income Statement
Operating
Decreases to Cash:
Balance Sheet
Assets
Liabilities
Stockholders' Equity
Oct. 31
Statement of Cash Flows
Income Statement
Financing
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